Why the coronavirus could lead to cheaper petrol in the UK

Why the coronavirus could lead to cheaper petrol in the UK
Why the coronavirus could lead to cheaper petrol in the UK

The deadly coronavirus which has hit China could have an inadvertent effect on fuel prices in the UK, according to analysis by the RAC.

The motoring organisation has said that travel restrictions imposed in China to combat the virus have affected demand for oil in the country, leading to a drop in the wholesale price of oil.

Oil fell below $60 a barrel last week and the RAC is predicting it could fall further.

According to the RAC, the drop in prices could allow retailers in the UK to cut their prices by 4p per litre for petrol and 5p per litre for diesel over the next fortnight.

“Some drivers are no doubt aware that fuel prices in the UK are affected by global events, but many will be shocked to hear the coronavirus outbreak in China should lead to the price of petrol and diesel falling dramatically,” said RAC fuel spokesman, Simon Williams.

“We urge the supermarkets, who are so influential in what drivers pay for fuel due to their massive market share, to pass on the wholesale savings they’re benefiting to motorists at the pumps, especially as they have actually increased forecourt petrol prices every day since 2 January.

petrol and diesel pumps
Prices at supermarket pumps have risen steadily since the start of the year (Photo: Shutterstock)

Prior to the outbreak of the coronavirus there had been fears the price of oil would rise due to tensions between Iran and the United States. However, ​after a brief spike, prices after the US assassinated an Iranian general, oil costs have fallen back.

Simon Williams added: “Drivers have been unfairly punished as a result of the very short-term oil price rise caused by tensions in the Middle East. It seems as though the big four supermarkets have been capitalising on this as the oil price has fallen steadily from a high of $69.82 on 6 January to $59.75 on 24 January. This is the first time oil has been under $60 a barrel since 31 October 2019.”

The RAC’s Fuel Watch service is now predicting that prices are very likely to come down. Currently, the average price of a litre of regular unleaded is 128p while diesel is 132.6p per litre

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