Oil prices fall to 18-year low but savings not passed on to motorists – The Sun

OIL prices have crashed to the lowest levels seen in 18 years as demand plummets due to the coronavirus outbreak.

But despite the falls, prices at the pumps are not reflecting these savings, driving groups have warned.

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The price of Brent crude oil fell by more than 29 per cent to $19.82 dollars (around £16) per barrel yesterday.

This is the equivalent to 12p per litre and the lowest price seen since 2002

Earlier this week, the price of oil in the US dipped into negative territory for the first time which meant buyers were being paid to buy oil. 

The cost of petrol has fallen for the past 12 weeks, according to the latest figures from the Department for Transport.

The average price of unleaded petrol is currently £1.09, the lowest it’s been since May 2016, and some drivers have even found prices under £1 a litre.

Diesel has fallen to £1.16 a litre, the lowest it’s been since July 2017.

The UK’s rate of inflation figure, which fell to 1.5 per cent in March from 1.7 per cent in February, was largely driven by plummeting oil prices filtering through to prices at petrol pumps.   

But although prices are falling, some groups say they aren’t reflecting the full impact of the fall of the cost of oil.

Simon Williams, spokesperson for the RAC, said: “It’s right that retailers charge a fair price for fuel that reflects the price of the raw product.

"In theory petrol prices could fall below £1 per litre if the lower wholesale costs were reflected at the pumps – but at the same time people are driving very few miles so they’re selling vastly lower quantities of petrol and diesel at the moment.

"This means many will be at pains to trim their prices any further." 

Howard Cox, founder of FairFuelUK, said he believes average petrol and diesel prices should be around 10p cheaper than they currently are.

He claimed before the recent oil price collapse, falls in wholesale costs have been held back by UK fuel providers. 

While the AA has also said it thinks drivers should have seen more significant savings.

It argues that if worldwide oil prices were factored in, drivers at the pump should have seen prices fall by closer to 19p – not the 11p we’ve seen so far.  


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The main reason for the fall is the coronavirus and the shutdown of worldwide economics as a result.

As drivers are making less journeys, they’re not buying as much petrol and not taking able to take advantage of the lower prices.

But the price we pay at the pump is also made up of different things, including fuel duty and 20 per cent VAT, and is therefore not purely based on the price of oil. 

Laura Suter, personal finance analyst at investment platform AJ Bell, said: “It’s also down to petrol stations whether they choose to pass on the drop in the oil price.

"Currently many are saying that they need to keep some of the fall for themselves to boost profits at a time when fewer people are using their car, and so demand for petrol has dropped.

“At the start of the lockdown we saw some big cuts from the supermarkets in their petrol prices, and they largely lead the rest of the market in any cuts to prices.

"So all eyes will be on those retailers to see how much they cut by before we know how much drivers will be saving each time they fill up."

Since the start of lockdown, road journeys are down by two thirds in the UK, according to the Department of Transport. 

As there has been a huge fall in demand for oil, there is now a global shortage of space to keep it.

“We’ve had too much supply and too little demand for an extended period of time, and all of the oil storage capacity is currently in use,” said Rachel Winter at the investment company Killick & Co. 

“Nobody wants to take delivery of oil next month because there’s nowhere to store it, so the price has dropped below zero,” she added.  

Some major UK travel companies are breaking the law by not issuing refunds.

Amazon is hiring 5,000 more staff in response to the pandemic.

While Barclays is giving customers a £750 interest-free overdraft.

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