The UK’s supermarkets are cutting petrol prices as the falling price of oil fuels a pump war. Brent Crude dropped below a symbolic threshold this morning, sliding below $50 a barrel to $49.99.
The supermarkets had already blinked, however. Asda capped its petrol prices at 107.7p per litre and diesel at 114.7p from 1 January, meaning customers won’t pay any more than that at any of the supermarket’s 500 filling stations. Tesco. Morrisons, and Sainsbury’s have all cut prices of both by 2p per litre this week. According to Asda, this is the lowest it has sold petrol at since the summer of 2010, and it has cut its prices 13 time since September.
As well as the tanking price of Brent Crude, the global benchmark for oil prices, George Osborne’s freezing of fuel duty has prevented prices from rising faster during the financial crisis. Fuel duty is currently 57.95p a litre.
There are whispers that if Brent continues its downward slide, the forecourt price could head south of £1 a litre. The RAC believes this is a real possibility, while the AA is less convinced.
The cuts are bringing us ever closer to the £1-per-litre average for petrol. Of course it would also be an extremely welcome move for motorists and businesses alike.
Oil prices having been dropping since a worldwide supply boom, with Brent crude losing almost 50 per cent of its value since June. OPEC, the cartel of oil-producing nations, has insisted it won’t lower its prices as it attempts to counter the rise of the US shale industry.
The cartel seems set on maintaining its market share, rather than chasing short-term profits. Saudi Arabia wooed European clients on Monday by lowering its prices.