Petrol prices set to fall: AA says the cost of fuel will drop again as fears over a second wave of global coronavirus infections begin to hit oil
- Drivers could see fuel prices decrease in coming weeks, according to the AA
- Concerns for a second-wave of Covid-19 is already seeing wholesale prices fall
- The motoring group said Asda has already been reducing pump prices as a result
- Oil firms were due to ramp up outputs in August following months of restrictions
Could we see petrol prices fall again on Covid-19 concerns? The AA says so
Motorists can expect to see the price of petrol fall in the coming weeks as the threat of a second-wave of Covid-19 infections hits the oil market.
New figures released this morning show that UK fuel prices rose for a second consecutive month in July, increasing by 3p-a-litre on average.
However, the AA says oil prices have already started to feel the brunt of fears concerning a second spike in coronavirus cases, claiming that Asda is already trimming its prices.
A spokesman for the motoring group said that unlike at the start of the pandemic when petrol prices fell below £1 per litre, this time UK families ‘won’t be locked down and locked out of the savings at the pump’.
The AA says that wholesale petrol costs have already been hit by the second wave, with Asda being the first to react by trimming their charges at filling stations.
Oil prices fell by around 4 per cent on Thursday, as a surge in coronavirus infections around the world threatened to jeopardise a recovery in fuel demand just as major oil producers are set to raise outputs.
Concerns that stricter lockdowns could be again enforced around the world and the industry facing another oversupply scenario has resulted in some hesitancy.
The Organistion of the Petroleum Exporting Countries (OPEC) was due to give the green light for its allies to increase outputs in August.
This would have seen an addition of 1.5 million barrels per day to global supply following restrictions enforced on producers at the start of the pandemic.
Opec was due to give the green light for oil producers to increase outputs in August, though there are now fears over countries going into enforced lockdowns due to the virus
Speaking to This is Money, Luke Bosdet, the AA’s fuel spokesman, said: ‘Wholesale fuel is taking a second hit from coronavirus and falling demand globally is bringing down the cost.
‘We already know Asda has started to cut its pump prices and, hopefully, others will follow.
‘This time, UK families won’t be locked down and locked out of the savings at the pump.’
When This is Money asked Asda if it had already started to cut prices at UK forecourts, senior fuel buyer, Dave Tyrer, said ‘Asda consistently offers motorists the lowest average fuel prices nationwide week in, week out and we’ll continue to do all we can to keep fuel costs low this summer as people look to get back on the road – for work or a Great British staycation.
‘Motorists filling up at Asda will pay no more than 109.7p per litre on unleaded and 113.7p per litre on diesel – and whenever we can make our prices even cheaper, we do.’
These prices are 4.5p-a-litre less for unleaded than the UK average at the end of July, and 4.3p per litre cheaper for diesel.
The RAC said fuel prices rose by around 3p-a-litre on average in July – a second consecutive month that motorists saw filling stations increase charges post lockdown
The RAC’s latest Fuel Watch report for July found that monthly fuel prices rose by 3p-a-litre on average, which means unleaded is now 7p-a-litre more expensive than it was at the end of May – when supermarkets were selling petrol for 99p–litre – and diesel is 6p dearer.
Petrol in the month rose 3.21p a litre from 111.06p to 114.27p, which sent the cost of a 55-litre tank to £62.85 – an increase of £1.77.
Diesel went up by a similar amount – 2.95p a litre – from 115.09p to 118.04p, making a complete fill-up £1.62p more expensive at £64.92, the RAC said.
If concerns over a second wave of Covid-19 infections dwindle, motorists could still be set to pocket savings at the pumps.
Simon Williams, the RC’s fuel spokesman, said an increase in oil production despite the risk of renewed lockdowns around the world could easily lead to supply outstripping demand and therefore a reduction on the forecourts of the UK.
‘As it is, there is some scope for retailers to already be reducing their prices” he explained.
‘If they play fair with drivers we ought to see 2p-a-litre come off the price of unleaded and nearer 4p come off diesel.’
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