Fleet News

Could cost of diesel fall to £1 per litre?

Row of fuel pumps

The average price of diesel fell nearly 3 pence from 117.5p to 114.54p per litre (ppl), last month.

The new figures, from RAC Fuel Watch, also show that the average price of petrol fell by 4.15p in April, from 113.1p to 108.95ppl.

Ironically, the impact of the coronavirus, despite being one of the main factors in why UK fuel prices have dropped, is also the reason why they are not falling any further, argues the RAC.

The cost of oil collapsed to its lowest level in 21 years last month – down to just $13 on April 21 – as a result of demand disappearing in the wake of the coronavirus outbreak.

However, while this sent wholesale prices plunging still further in the month, some of the UK’s largest fuel retailers did not cut forecourt prices with so few people buying fuel in the first place.

This was in sharp contrast to March which saw the supermarkets announce an unprecedented 12ppl price chop on a single day.

April can therefore be seen very much as a ‘catch-up’ month for other fuel retailers, says the RAC.

While supermarket prices were largely static, it was other forecourts finally cutting their prices which led to the average price paid by drivers across the UK falling.

Subject to any significant easing of the coronavirus lockdown restrictions, the RAC says that there remains scope for a further 12ppl to come off the prices of both petrol and diesel.

If fully reflected at the pumps, this would see unleaded down to an average price of 96ppl and diesel down to 102ppl.

The last time pump prices fell that low was in 2016, when in February of that year the average price of diesel fell to £1 and petrol was 101ppl, according to the RAC Foundation

However, the RAC acknowledges that retailers are only going to reduce prices again if they can be confident of selling fuel in large enough quantities.

RAC fuel spokesman Simon Williams explained: “While it might seem odd that fuel price falls stalled last month despite wholesale prices coming down yet further, it is explained by the simple fact that UK fuel retailers will have been selling a fraction of what they would normally have sold in the last six weeks.

“We expect that only an easing of lockdown restrictions by the UK Government will trigger forecourts into changing their prices significantly, as this would effectively be a signal to millions that they can start making different types of journeys again by car, not just those currently deemed ‘essential’.”

As and when they do, says Williams, drivers could be in line for even cheaper fill-ups in the coming months if wholesale prices remain suppressed.

However, he said: “That remains a big ‘if’ because as soon as more of us start driving the price of oil could begin to increase.

“A cut in oil production, which was previously agreed by some of the world’s largest oil-producing nations, is likely in time to lead to the oil price drifting back up again, although for now supply is outstripping demand so much that it’s hard to see prices increasing by any great margin in May.”

Regional fuel price variation

Regional average diesel pump prices

Diesel

01/04/2020

30/04/2020

Change

UK average

117.50

114.54

-2.96

Northern Ireland

113.44

110.66

-2.78

North East

115.94

113.49

-2.45

Wales

116.23

113.64

-2.59

North West

117.13

113.77

-3.36

Scotland

116.77

113.91

-2.86

Yorkshire And The Humber

117.18

114.13

-3.05

West Midlands

118.63

114.63

-4.00

South West

117.80

114.93

-2.87

East Midlands

118.39

115.18

-3.21

East

118.39

115.43

-2.96

London

119.34

115.58

-3.76

South East

119.34

115.90

-3.44

Regional average unleaded pump prices

Unleaded

01/04/2020

30/04/2020

Change

UK average

113.10

108.95

-4.15

Northern Ireland

107.30

104.03

-3.27

North East

110.76

107.00

-3.76

Wales

111.02

107.02

-4.00

Scotland

111.42

107.73

-3.69

North West

112.83

108.41

-4.42

Yorkshire And The Humber

111.95

108.67

-3.28

South West

113.03

109.10

-3.93

East

114.09

109.45

-4.64

West Midlands

113.80

109.62

-4.18

East Midlands

115.08

109.84

-5.24

South East

115.39

110.42

-4.97

London

115.87

110.55

-5.32

Your new issue of Fleet News

In the April issue

The impact of the coronavirus on fleets 

One-in-four fleet agree contract extensions; less than 10% of company cars driven for work / p4

The SMR challenges of coronavirus / p8

Commercial Fleet: Many new measures on hold / p56

Fleet spotlight: Auto Windscreens

How Shaun Atton revolutionised fleet practices to save more than £150k and became a Fleet News Award winner / p32

Fleet & Mobility Live

The UK's most influential fleet event is back with a new name / p28

Electric fleet

Salary sacrifice and EVs / p22

Making EVs the number one choice / p24

Read now

Click here for fuel and fuel cards best practice and procurement insight

Leave a comment for your chance to win £20 of John Lewis vouchers.

Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

Comment as guest


Login  /  Register

Comments

No comments have been made yet.