After oil prices plummeted to eighteen-year lows in April, the lower wholesale costs have at last begun translating into savings at the petrol pump
If you own a large capacity, V8 petrol powered-performance or luxury vehicle, then get ready for welcome news. Fuel retailers have finally handed over record unrefined oil cost savings directly to motorists, with some supermarket forecourts offering petrol for as little as 96.9 pence per litre.
As a result, if you have a 50-litre fuel tank, you could save £4.50 for each fill-up!
However, it looks like you’ll still need to search your local area for the lowest fuel prices, as an AA petrol price report showed that unleaded cost as much as 112.6p/litre in London during April. The average petrol price during April at supermarkets was 104.8p per litre.
Why have petrol prices dropped so low?
After the COVID-19 pandemic caused governments to lockdown entire countries and place heavy restrictions on travel, the worldwide demand for oil nosedived. Additionally, a price war between two major oil-producing countries resulted in a considerable overabundance of crude oil. Oil values plunged to lows not seen since 2002.
Petrol prices, broken down
When you pay your fuel bill at the garage till, where does the money go?
Out of the 96.9 pence (including VAT) you hand over, according to Shell, for every litre:
- 57.95p goes to the Government in fuel duty tax
- 26.16p equates to the wholesale petrol price
- The final 12.79p covers transportation costs, retailer expenses and profit. It is thought that the retailers rake in as little as 4.83p profit per litre
RAC: Credit where credit is due
Motoring advocates, like the RAC, praised the move by fuel retailers to drop prices. RAC’s fuel spokesperson, Simon Williams, said that credit should be given to the supermarkets for taking the lead in cutting prices, offering consumers “very fair” prices and that the charges were more “reflective of what the retailer is itself paying to buy the fuel in”.
Williams also commented that the lower prices may only be short term.
“It remains to be seen how long prices this low will persist for, with some early indications that wholesale petrol prices have started to rise as a result of the world oil price creeping up”, Williams warned.