Petrol prices head towards £1 in the UK

Cost of petrol in the UK approaching £1 a litre, for the first time since 2016

4/7/2020 4:32:00 PM

Cost of petrol in the UK approaching £1 a litre, for the first time since 2016

An oil price war and Covid-19 travel restrictions are cutting fuel costs but it is not good news for everyone.

That said, the pump price cuts in March were dramatic.UK petrol prices fell by their largest margin in 12 years during the month, according to the RAC.More than 9p came off the average price of unleaded in the month while the price of diesel was down by nearly 8p.

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Another factor propping up the price of fuel is that the biggest proportion of the money you hand over for a litre of petrol goes to the government in the form of tax.Fuel duty is charged at 57.95p per litre.On top of that you have to pay VAT at 20% on the cost of petrol.

How much should I expect to pay for petrol?It varies according to which supplier you use and where you are in the country.Supermarkets tend to offer the lowest prices, mainly because they use petrol as a loss leader.That means they sell it cheap in the hope that once you've filled up, you'll pop into the accompanying store and spend lots more cash.

So while the average cost of petrol at the end of March was 113.54p, according to the RAC, supermarket prices were as low as 104p a litre.But prices at local garages are set according to nearby competition.So if you only have one local garage close by with no immediate rivals, it will be able to charge more as it has, to a degree, a captive market.

That's why prices vary even at the same supermarket chain or petrol company.Image copyrightImage captionTravel restrictions linked to Covid-19 have impacted demand for fuelThe AA said the cheapest average unleaded petrol price at the end of March of 108.13p was found in Northern Ireland.

But in the south-east of England the average was more 8p higher at 116.19p.Will petrol fall to £1 a litre?Competition has driven the price of petrol down towards £1.By the beginning of April, the cheapest litre on the market was being flogged at just 102.7p, via a supermarket.

But hopes of it crashing through the £1 barrier remain in some doubt after the oil-producing countries' organisation Opec was reported to be working on restricting production.Any such move would depend on Saudi Arabia and Russia ending their price war.

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The rumour pushed oil prices up more than 20% in one day at the beginning of April.Petrol pump prices remained unaffected by the short-term oil rise, partly because of the ongoing impact of Covid-19 on demand.Experts reckon that oil prices are likely to be subdued, at least in the short term.

So how will that translate into UK pump prices?"Despite the recent enormous supermarket price cuts, based on the wholesale cost of unleaded and diesel, there is still scope for further reductions at forecourts," said RAC fuel spokesman Simon Williams.

"Indeed, if the supermarkets were to more fully reflect the huge reductions in wholesale prices, we would certainly sell see unleaded sold for under £1 per litre, something they last did in March 2016."However, the AA reported seeing the price fall below £1 a litre at a handful of petrol stations, in Northern Ireland and one near Birmingham.

Will petrol stations close?Concerns are growing for independent fuel retailers.The price cuts are hitting their margins and they are currently selling much less petrol because of the coronavirus shutdown.The Petrol Retailers Association (PRA) has warned that many petrol stations will have to close in the coming weeks, as sales of fuel dry up and their businesses become unviable.

A Department for Business, Energy & Industrial Strategy survey published in early April showed that petrol consumption was down by 75% and diesel by 71%."To help freight move and help key workers travel safely and independently through this period of crisis, petrol filling stations must remain open, but it is proving to be a challenge for many filling stations," said Brian Madderson, chairman of the PRA.

Read more: BBC News (UK) »

Typical when I’m not using the car 😂😂 Wahoo! Cheaper to get to work now. Filled up this week just because. Has the SNP commented on this news? Out of interest. The Nats based their whole argument on $100 pb oil. What would of happened if Scotland had independence? Who would of bailed them out? Great timing while many don’t need it!

Where? Typical joke as we are on lockdown Heads to £1 per litre? It's worth 45pence a litre? With tax! What are you raving about? bbcyourquestions Uckin typical when we Carnt go anywhere Sod it im off to buy 5 cars so I can panic buy cos I missed out on the pasta and bog roll Wait until China goes full production again.

Funny how people haven’t complained about the rise in petrol under the Torys but they did when it went up to about 86 p under Labour!! FakeNewsBBC Good time to throw some money into some oil n gas heavy hitters. I just hope the hard of thinking don't try to stockpile it. It’s ok Trump and Putin will have it artificially high soon 👍🏻

Damn the last time I filled my car up it was 1.34 and it’s still almost full, by the time I need more it will most likely be 1.50 Typical... I've got a full tank, as I haven't been anywhere.. and with a smartcar4two I won't need any until next year, at this rate 😁 The first target for tax rises ? Damn, just gone electric.

Quite ironic when we aren’t supposed to be going anywhere by car 🤷‍♀️ My car is on the drive My motorcycle is in the garage Both SORN I'm on the sofa.... Don't really matter, does it? Stay safe Stay in Wash your fucking hands And keep your distance That is all. It's going to get a lot lot higher Secret oil crisis going on taking second fiddle to the Coronavirus. America because of this could lose its superpower status losing the petrodollar. Course we may have another war very soon to top things off.

GlenFearce1 It was 3 shillings and 9d a gallon in 1970. Just saying.... Brilliant... just when we can't use it. Just when we can’t sodding go anywhere 😡 Cost of petrol approaching 43p in the UK. 57p is purely tax Great , just when I am going nowhere☺️ An as soon as we’re allowed to use the cars again 💥 boom! Up 30p 🙄

Shows you they dont need all that extra money... And by the time I can afford a car I won't be able to afford the petrol. 😔 Meanwhile having to pay £10 for taxi to get to shops as a bus /trams are too overcrowded and I'm moderate-high risk BBCScotlandNews I’m getting about 3weeks to the gallon at the moment

i'm Manuel Franco the Power Ball Lottery Winner, if you've outstanding credit cards debt,let me help you with the bills BBCScotlandNews Just when mine are sitting full and no where to go. Typical lol 😂 ffs I filled up a month ago £1.21 a litre but not use the car... boom when all this is over, upto £1.50 I bet

Everyone will go out and panic buy 😂 BBCScotlandNews Aye very good when no one is out and about to benefit from it ! Plot twist: we can’t go anywhere About time oil price dropped months ago. So have we been ripped off for so long? 2016? I don’t remember it being that low then; 2006 maybe. Great. Just as we've got nowhere to go.

Why is Nigeria the producers of oil still high? Great timing when nobody is going anywhere It is what it is. Ventilators supplier

Petrol prices head towards £1 in the UKAn oil price war and Covid-19 travel restrictions are cutting fuel costs but it is not good news for everyone. cause no one is buying Not dropping anywhere near that by me. Dropped a whole 2p We are an Egyptian family applying for asylum in Malaysia. We live in danger and are threatened by the Malaysian police at the instigation of Arab businessmen. I made a report and submitted it to the protection department at UNHCR, but nothing was done. Please help. Protection

We can't raise a mortgage against our £1.25m home for our holiday let barnWe need £50,000 for a second bathroom but mention ‘holiday let’ and lenders just shy away Have you accidentally linked a Telegraph article? Not now, the guardian Oh how my heart fucking bleeds...

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Petrol prices head towards £1 in the UKAn oil price war and Covid-19 travel restrictions are cutting fuel costs but it is not good news for everyone. cause no one is buying Not dropping anywhere near that by me. Dropped a whole 2p We are an Egyptian family applying for asylum in Malaysia. We live in danger and are threatened by the Malaysian police at the instigation of Arab businessmen. I made a report and submitted it to the protection department at UNHCR, but nothing was done. Please help. Protection

Rare £2 coin on eBay for staggering £1million after owner found it in carAn eBay seller has priced a £2 coin for £1 million - but that's not the only expensive item they're selling I could put my toe nail clippings on eBay for £1 million, it doesn’t mean that’s what they’re worth. hautahbuhgee Wow give em £1.50 cause its second hand