The price of Brent crude has changed
Motorists could be set for a change in petrol and diesel prices within the coming days.
The RAC has indicated that pump prices should continue to drop this weekend and into next week, after the cost of Brent crude fell to around $74 a barrel on Friday morning, having briefly dipped below the levels recorded prior to the outbreak of hostilities in the Middle East. Brent crude was changing hands at approximately $73.94 a barrel early on Friday, down sharply from the highs of well over $100 seen during the conflict, and on track for a significant weekly loss as concerns over major supply disruption began to ease.
The decline in oil prices has prompted renewed calls for fuel retailers to swiftly pass on savings to hard-pressed drivers.
RAC head of policy Simon Williams said: “On the back of the lowest oil price since before the Iran war started, drivers should see the average price of petrol fall below 150p in the next week or so. If this happens, unleaded will be at its lowest price since March 26.
“Diesel, having dropped below 170p today for the first time since March 22 as shown in the Government’s Fuel Finder data, ought to go back under 160p. We urge retailers to pass on the savings they’re benefiting from on the wholesale market to drivers straightaway.
“Before the war began we had an oil price of $70 which translated to an average petrol price of 132p and 141p for diesel.”
According to RAC data, average petrol prices have already declined by 7.2p per litre since reaching a peak of 159.53p on 28 May, while diesel has fallen by 22.17p per litre from its April high of 191.54p. On Thursday, average forecourt prices stood at 152.32p for petrol and 169.37p for diesel.
The recent reductions follow a significant turnaround in global oil markets after concerns about potential disruption to supplies through the Strait of Hormuz started to subside. Tankers have resumed passage through the crucial shipping route and traders are increasingly confident that global supplies will remain abundant.
The decline has prompted fresh scrutiny of fuel retailers, with consumer champion Martin Lewis urging motorists to monitor pump prices closely. He said this week: “Now is the time to watch for price gouging. It normally happens when prices drop after a peak.”
He later added: “No accusation just saying it needs monitoring.”
The Competition and Markets Authority is already conducting enhanced monitoring of the fuel market, tracking pump prices, retailer margins and wholesale costs amid concerns that motorists may not always receive the full benefit of falling oil prices.
The watchdog has repeatedly investigated whether reductions in wholesale fuel costs are being passed on fairly to drivers, following concerns about weak competition in certain areas of the market. Motoring organisations have repeatedly raised concerns about the so-called “rocket and feather” effect, whereby forecourt prices surge swiftly when oil costs climb but descend far more gradually when wholesale prices drop.
The AA has similarly maintained that prolonged falls in wholesale fuel and oil prices ought to be passed on to drivers at the pumps, particularly given that households continue to feel the strain of the broader cost-of-living crisis.
