Asda took the lead and reduced petrol prices down to 113.9p per litre this week, and I was only congratulating them about this yesterday. Well it looks like Sainsbury’s are following Asda’s lead as their unleaded petrol has also been reduced to 113.9p per litre.
So there is some good news for motorists at last as supermarkets are fighting each other in the petrol price war. My local Sainsbury’s was selling unleaded petrol for 113.9p per litre this morning, which is uncannily the exact price that Asda are selling it.
But before we get carried away and drive from Lands End to John O’Groats for the hell of it, lets remember that 113.9p per litre is still £5.18 per gallon, most of which is tax.
Why have petrol prices fallen recently, though? The price of Brent Crude has been creeping up again to around the $74 per barrel, and the pound is still weak against the dollar.
I think the recent petrol price cuts are due to the lag in the process from oil extraction to the sale of petrol on the forecourt. Oil was costing $85 per barrel a few months ago, so we are reaping the benefits, albeit delayed, of that price reduction.
If the price of crude oil continues to strengthen, then I’m afraid that we will see a rise in petrol prices again in about six weeks time, perhaps just in time for the second tranche of the increased fuel duty in October.