Petrol and diesel prices are set to fall as the price of crude oil has plummeted in the recent stock market turmoil.
There is good news for motorists as two supermarket chains have reduced their petrol and diesel prices by 2p per litre.
Responding to the large falls in the price of crude oil, Asda and Morrisons have both lowered their forecourt prices and other supermarket chains will soon follow.
This downward move in petrol and diesel prices does follow recent price hikes in recent weeks. For example, Sainsbury’s were selling unleaded petrol for £1.29 per litre two weeks ago, but have recently raised their prices back to £1.32.
A 2p per litre cut by Sainsbury’s in response to market pressures from Asda and Morrisons and the fall in crude will take the price of petrol back to where it was two weeks ago.
The price of crude oil is always volatile as it rapidly responds to inventory supplies and global economic conditions, however oil has fallen by a massive 25% since hitting $115 a barrel in May.
If crude oil, currently priced at $78.35 per barrel, its lowest price for 8 months, continues to fall, or remain at these levels, then motorists can expect to see further falls in petrol and diesel prices in the weeks to come, although they will not match the percentage falls seen in crude.
MoneyHighStreet.com comments: There seems to be a perplexing and annoying disconnect between the price that we pay for petrol and diesel and the current price of crude oil. Crude prices can fall, and rise, very rapidly, as we have seen over the last two weeks, however it must also be remembered that we don’t put crude oil into our cars, it has to be refined and transported to the filling stations.
Rapidly fluctuating prices of crude and the lag between extracting the oil and processing it for our cars means that changes to petrol and diesel prices will not closely mirror the changes in crude oil futures prices.
That said, we see price hikes occur rapidly as crude becomes more expensive and prices falls occur slowly as the price of oil falls. That appears to be blatant profiteering by the oil companies and retailers.