Asda's done it. From tomorrow its petrol will be cheaper than £1 a litre, but only for a couple of days.
As oil prices continue to languish around seven year lows, Asda has announced it will cut the price of its unleaded petrol to 99.7p a litre, and diesel to 103.7p per litre.
The reduction will only last until Sunday 13 December, and comes after the supermarket ran a Black Friday 99.7p petrol promotion.
The RAC estimated this week that the average price of unleaded petrol will fall by 3p in the next two weeks, taking the average price to around 103p, thanks to such low oil prices. It expects diesel to fall by 5p a litre.
The RAC’s Fuel Watch spokesman Simon Williams said: “Supermarkets [should] do the right thing and pass on those savings at the pump. With the price of wholesale unleaded dropping due to oil falling below $40 the climate is right for £1 a litre petrol.”
However, chairman of the Petrol Retailers Association (PRA), Brian Madderson, said today he was sceptical petrol prices would fall much lower, adding:
The PRA believes that it is the UK wholesale cost in pence per litre that drives pump pricing and there is no direct linear relationship to changes in Brent crude oil prices.
The average price for petrol in the UK is still close to 107p per litre, and the wholesale price last night was only 0.37p per litre less compared to mid-October.
It would require a substantial period of time for Brent crude oil to remain at or below $40 a barrel, and for the wholesale price to fall dramatically in order for us to see pump prices fall to the predicted level by Christmas or even the New Year.
Asda's petrol prices are capped across its 277 UK petrol stations, and there's no local variation in price.