Fuel prices expected to ‘dramatically fall’ in UK as deadly coronavirus affects demand01/28/2020
Fuel prices will be dramatically cut as the wholesale price of oil falls because of less demand for the resource across China. The nation is the second-largest oil consumer in the world but will see a reduced level of consumption as travel plans are restricted in light of the deadly virus.
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The reductions could see petrol prices fall by four pence per litre over the next fortnight with diesel also set to fall by around five pence per litre.
There had been fears overall oil prices would increase after tensions between Iran and the United States spiralled out of control.
However, RAC experts say there was just a very small price rise before overall costs fell away which could see reductions take effect within days.
RAC fuel spokesperson, Simon Williams, said: “Some drivers are no doubt aware that fuel prices in the UK are affected by global events, but many will be shocked to hear the coronavirus outbreak in China should lead to the price of petrol and diesel falling dramatically.
“We urge the supermarkets, who are so influential in what drivers pay for fuel due to their massive market share, to pass on the wholesale savings they’re benefiting to motorists at the pumps.”
Mr Williams said supermarkets have increased forecourt prices in the UK every day since January 2.
He claimed supermarkets were unfairly punishing motorists for short term oil price increases with shops cashing in on the extra capital even after costs began to fall.
He said the price of oil is now less than $60 a barrel for the first time since October 31, 2019 which should bring price reductions for petrol and diesel prices.
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According to RAC Fuel Watch, the total cost of petrol and diesel is very likely to come down over the coming weeks.
Diesel now stands 132.59 pence per litre with unleaded now costing 128.16 pence per litre.
Data from the Office for National Statistics shows petrol and diesel prices have continued to steadily increase since December 23.
Just one month ago, diesel prices were an average of 129.81 pence per litre with petrol at an affordable 124.16.
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It means average petrol prices are up 2.78 pence per litre compared to December 2019 with diesel costs 3.11 pence per litre higher.
The sudden increase was the end of four months of consecutive fuel price reductions.
Forecourt price rises were down to a small increase in global oil prices which many say could have been caused by tensions in the Middle East.
Petrol and diesel costs would be expected to rise and fall as wholesale oil costs change as this determines how many retailers pay for their supplies.
However, campaign team FairFuel UK said supermarket were using tensions in the Middle East as an excuse to increase prices.
The group says the cost of crude oil dropped 4.1 percent over the period where tensions increased.
This would mean road users could have been paying less at fuel station forecourts.
The campaign group claimed savings on wholesale oil prices had not been passed onto customers since January 2018.
The RAC has also claimed retailers do not pass high enough savings onto consumers when the price of oil drops.
In November, the motoring group said petrol prices were up to seven pence per litre too expensive compared to what the price of oil was at the time.
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