Oil prices have been falling over the last few weeks, however petrol prices at the pumps have remained high, until today. Three large supermarkets have announced that they are reducing the cost of petrol and diesel in response to the shrinking oil price.
The price of oil has fallen from its record high of around $147 per barrel over the last few weeks. It is now trading at $130.88 per barrel, almost an 11% reduction.
Petrol and diesel prices at the pumps have remained high during those recent falls in oil prices. You still have to pay £1.34 for diesel and £1.25 for petrol and the slow response of forecourt prices to falls in oil price is something I pointed out in June.
The supermarkets are at last realising that their fuel costs are too high and the news that they are reducing their forecourt costs is very welcome. Lets hope that all petrol stations follow the example set by the supermarkets.
There is a little nagging thought that occurs to me about this, though. Oil prices have fallen by 11%, however the supermarkets are only go to reduce their fuel prices by 3p or 4p per litre – a 3% reduction.
The oil costs the same to refine, transport, and sell, so why are we not seeing a 11% reduction in petrol and diesel costs, which would amount to a very welcome reduction of 13p per litre of diesel?
Perhaps the supermarkets are not being quite as generous as they would like us to think.