Fuel could become cheaper than bottled water, says motoring group

Supermarket chains have cut petrol and diesel to under £1 per litre and could go further as oil prices plummet, RAC predicts

Fuel pump
Average prices across the UK are 102.5ppl for petrol and 103.2ppl for diesel. Photograph: Danny Lawson/PA

Fuel could become cheaper than bottled water if the price of oil continues to plummet, motoring experts have said.

Oil prices have fallen by 30% since early December, with Brent crude sinkingbelow $30 a barrel on Wednesday. Many analysts predict it could tumble even further, with Standard Chartered warning $10 a barrel is a possibility.

The RAC said this could lead to UK motorists paying 86p per litre for fuel, as long as the pound does not continue to weaken against the dollar.

In December, supermarket fuel retailers cut petrol to under £1 per litre for the first time since 2009 – excluding promotions – and last week diesel passed the same figure. Average prices across the country are 102.5p per litre for petrol and 103.2 for diesel.

Simon Williams, of the RAC, said: “With no apparent end in sight to the freefalling price of oil, motorists can expect some really low fuel prices in 2016.

“Breaking through the £1 a litre price point for both petrol and diesel was clearly a welcome landmark, but it looks as though there is more to come. In fact, we may get to a bizarre time when a litre of fuel is cheaper than a litre of some bottled waters.”

The motoring organisation claimed diesel should be cut even further given current oil prices. “Retailers still need to pass on more wholesale price savings on diesel to motorists at the pump, as the wholesale price is still 3p a litre cheaper than that of petrol,” Williams said.

“We should really be seeing diesel priced several pence cheaper than petrol on every forecourt, to the point where the average price of diesel goes below that of petrol.”

[Source:- the gurdian]