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Price Of Oil Falls Again And UK Fuel Prices Follow Suit

By raccars Published

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It's a welcome start to 2015 for British motorists, as supermarkets embark upon a new round of petrol price wars and the customer benefits. The UK's four biggest supermarkets have cut the price of fuel again by two pence per litre on the back of lower oil prices.

Motoring organisations expect the price of petrol to go below £1 per litre by the end of January, after Asda, Morrisons, Sainsbury's and Tesco knocked two pence per litre off the price of fuel. This means consumers and businesses are now paying less for fuel than they have over the last five years.

Brent crude, the oil price marker, is now at $55 per barrel, which is a five and a half year low and has affected the wholesale price of fuel, allowing petrol and diesel suppliers to pass on cuts to motorists. The price of oil has fallen by more than 50% since June last year. The RAC believes there is room for prices to go down yet further, maybe by another five or six pence per litre by the end of the month.

While commonly, the major oil producing countries make a habit of reducing production to limit supply and push up oil prices after a slump, this time Saudi Arabia and other nations have refused to cut production. Wider international factors have also played a part in keeping oil prices low, such as the availability of shale oil in the USA and concern about renewed financial instability in the Eurozone, Japan and China.

Fuel customers at Asda are now paying a maximum of 105.7 pence per litre for petrol and 112.7 pence per litre for diesel. This is the fourteenth fuel price cut Asda has implemented since the end of September, with petrol now 21 pence per litre cheaper and diesel 17 pence per litre cheaper than it was then. Morrisons and Sainsbury's have both cut fuel prices seven times since the beginning of December.

While the news is good for British fuel buyers, motoring organisations are cautioning that rural customers are missing out on the price cuts applied to more competitive areas. The price of oil has driven the fuel price cuts, but with tax accounting for 70% of the price per litre on British forecourts, petrol and diesel are unlikely to drop much below £1 per litre.

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