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It Has Finally Happened - Petrol In The UK Drops Below £1 Per Litre

By raccars Published

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After weeks of speculation, the price of petrol in the UK has finally dropped below £1 per litre, for the first time in five years. The price of 99.7p per litre was seen in the West Midlands, at three Harvest Energy service stations, as the chain's owner decided he'd had enough of unfair supermarket prices.

The independent garage chain cut the price of petrol by 6p per litre as a response to what the owner calls 'cheating' by the supermarkets. Dr Velautham Sarveswaran believes British motorists are being ripped off by supermarket fuel station prices and, as the owner of three garages in Birmingham, Redditch and Walsall, decided to take steps to counter what he called the supermarket fuel 'scandal.' Customers are apparently travelling from as far as 20 miles away to take advantage of the Harvest Energy price cut.

The defunct chain was bought by Dr Sarveswaran in 2002 and revived by strategic low pricing. Its owner claims that at 99.7p per litre of petrol, he still makes money and his customers are happy. Having brought the price of petrol down to £1.05 and diesel to £1.12 per litre over Christmas, Harvest Energy ran out of stock three times, as customers took advantage of the cheaper fuel. Now they are the first garage in the UK to sell petrol for less than £1 per litre since 31 May 2009, when the average price of a litre of petrol was 99.9p. Only a couple of years ago petrol cost more than £1.40 per litre.

Other service stations are expected to copy his example over the next few days, as the price of crude oil keeps falling. A barrel of Brent crude cost €114 in June 2014 but on Friday last week, the price had dropped dramatically, by 56%, to $49.95. Petrol retailers are coming under pressure from the government to drop their prices further to keep up, and the average price of a litre of petrol is now £1.10.

Chancellor George Osborne is now threatening fuel providers, power companies and airlines with sanctions if they don't make more effort to pass on lower oil prices to customers. However, the Petrol Retailers Association has pointed out that only about 20-25% of the cost of a litre of fuel is the wholesale price and that 57.95p in every litre is fuel duty paid to the government, on top of 20% VAT. The association is embarking upon talks with the government to discuss the situation.

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