The average cost of filling up a car with unleaded petrol has dropped to its lowest level since May 2016, as a result of the historic oil price falls caused by the coronavirus outbreak, data from RAC Fuel Watch shows.
The average price of a litre of petrol fell by 4.15p in April, from 113.1p to 108.95p, meaning the cost of filling a 55-litre hatchback car fell from £62.21 to just £59.92. Those able to refill at the cheapest UK supermarket forecourts meanwhile were able to do so for just £56.49. Drivers of diesel cars can now refill for £63, down from £64.63, thanks to the average price of a litre falling nearly 3p from 117.5p to 114.54p per litre last month.
Ironically, the impact of the coronavirus, despite being one of the main factors in why UK fuel prices have dropped, is also the reason why they are not falling any further. The cost of oil collapsed to its lowest level in 21 years last month – down to just $13 on 21 April – as a result of demand disappearing in the wake of the coronavirus outbreak.
But while this sent wholesale prices plunging still further in the month, some of the UK’s largest fuel retailers did not cut forecourt prices with so few people buying fuel in the first place. This was in sharp contrast to March which saw the supermarkets announce an unprecedented 12p per litre price chop on a single day.
April can therefore be seen very much as a ‘catch-up’ month for other fuel retailers – while supermarket prices were largely static, other forecourts finally cut their prices which led to the average price paid by drivers across the UK falling.
Subject to any significant easing of the coronavirus lockdown restrictions that have forced millions of drivers to restrict the number of journeys they have taken since 23 March, there remains scope for a further 12p per litre to come off the prices of both petrol and diesel.
If fully reflected at the pumps, this would see unleaded down to an average price of 96p per litre and diesel down to 102p. Clearly however, retailers are only going to reduce prices again if they can be confident of selling fuel in large enough quantities.