Morrisons have led the way in cutting the price of diesel to less than £1 per litre - with Asda, Tesco and Sainsbury’s all doing the same.
The Yorkshire-based supermarket chain slashed the price to its cheapest level since 2009 by going to 99.7p at all its petrol stations. The other three major supermarkets all went below the £1 mark today. The RAC have said that an eventual drop to 90p a litre is “not that far-fetched”.
Morrisons say that they are cutting prices because a sustained reduction in oil price gives them an opportunity to pass on savings to customers. They also want to be “amongst the first” to deliver cuts when wholesale prices fall.
The company were the first retailer, last month, to bring the everyday price of its unleaded fuel below the £1 mark. The latest cut has come at a time when the price of oil has reduced to its lowest level in more than a decade.
Bryan Burger, Morrisons Petrol Retail Director, said: “With this cut, diesel car drivers will be saving an astonishing 20 quid when they fill-up compared to the high point reached in 2012. If oil prices continue to fall then we remain ready to cut the price of diesel and unleaded.”
That fuel price saving figure is based on filling up with 50 litres of fuel.
Asda claimed that they were leading the way in dropping prices. Andy Peake, their senior petrol director, said: “This latest announcement shows that we’re committed to being the driving force behind lowering fuel prices.”
Tesco’s Fuel director, Peter Cattell, commented that they are giving customers “a big helping hand for the new year”, while Sainsbury’s head of fuel, Avishai Moor, called it “great news for diesel drivers”. Both companies will continue to monitor the oil market and foreign exchange rates.
The RAC, though, argued that today’s reductions should have happened before. Before the Christmas period, the cost of petrol - which is typically cheaper than diesel - dipped below £1 per litre.
Steve Godding, director of the RAC Foundation, said: “It seems the January sales are extending beyond the high street to garage forecourts. The question is, why haven’t we seen these bargains sooner and more widely? After all, the wholesale price of diesel has been below that of petrol since early December, yet the story at the pumps has been the opposite with diesel 3 or 4p a litre higher throughout that period.
“More generally, low pump prices are a product of a barrel of oil changing hands for less than a third of the price it did 18 months ago.”
RAC Fuel Watch monitors the price of oil and its relation to forecourt prices. Pete Williams, spokesman for them, added: “The lion’s share of the price we pay at the pump, around 75%, goes to the Treasury in duty and VAT. The rest of the price is production, refinery costs, distribution and the fuel retailers’ margins.
“This means that there is a limit to how low we will see the price of diesel and petrol go, but prices could well continue to fall and a pump price of 90p a litre is not that far-fetched.
“The focus has been on the price of petrol but with more diesel sold in the UK the retailers should be more transparent and reflect the savings they are making in the wholesale price more swiftly at the pump. And right now diesel is cheaper than petrol.”