February saw the price of petrol and diesel tumble making for some of the biggest monthly reductions seen since the start of 2000, according to data from RAC Fuel Watch.
Unleaded fell by 3p (2.93p) a litre to 124.02p – it’s 19th biggest drop in a month – and diesel by 4.24p to 127.04p, the 11th greatest monthly fall seen since the RAC began monitoring fuel prices. This means the cost of filling up a 55-litre family car with petrol is £1.61p less than it was in January at £68.21. For diesel it is £2.33 cheaper at £69.87.
Asda is leading the way among the big four supermarket fuel retailers by selling petrol for 116.78p a litre – 3.5p lower than it was at the start of February and 3.5p cheaper than its closest competitor. It also reduced diesel by 5.9p to 118.8p which makes it 4p cheaper than its nearest rival. The average price charged for unleaded between all supermarket sites is 119.19p and 121.62p for diesel – around 5p less than the UK average prices.
The pump price reductions have been driven by a $10 slump in the price of a barrel of oil from a high of $60.28 on 20 February to $50.41 by the close of the month. Over the course of the whole month though the reduction was far smaller at just $3, with a barrel having started February at $53.48.
As a result, the wholesale price of unleaded dropped to below 90p a litre before delivery, retailer margin and VAT. The last time a price as low as this was seen was at the end of January 2019 which led to an average UK pump price of around 119p – 5p less than the current average. The diesel wholesale price finished February at 92p a litre – the last time this was recorded was at the end of August 2017 which also translated to a forecourt price of around 119p a litre – 8p a litre lower than the current UK average price for diesel.
For this reason, the RAC is calling on retailers to keep cutting their pump prices so drivers are charged a fair price which properly reflects the large reductions on the wholesale market.
RAC fuel spokesman Simon Williams said: “February was a good month for drivers with two rounds of supermarket price cuts, both led by Asda, which put an end to two consecutive monthly rises. These resulted in 3p being shaved off the average price of petrol and 4p off diesel.
“While it is good drivers are benefitting from lower forecourt prices, in reality the wholesale price is such that the big four supermarkets, which dominate UK fuel retailing, should cut their prices again. At the moment both fuels are 6p a litre too expensive which means for petrol we should really be seeing a UK average of 118p. Unfortunately, we don’t think diesel will come down to the 2017 price of 119p a litre due to wholesale prices only dropping to 92p a litre briefly as a result of oil suffering its biggest weekly decline in more than four years.
“The oil price has slumped due to the spread of the coronavirus prompting fears of slower global demand. This may well lead to a move from oil producer group OPEC and its allies to restrict production when they stage an extraordinary meeting in Vienna on Friday. If they decide to take action to prop up the barrel price it would very likely put an end to falling forecourt fuel prices.”