Pump prices fall by 2.5p a litre in March
The price of fuel fell by more than 2.5p a litre in March bringing the average price of petrol down to 117.54p and diesel to 119.54p, data from RAC Fuel Watch reveals.
At the start of March a litre of unleaded cost 120.15p and diesel 122.19p, but the biggest fall in the price of a barrel of oil since last July led the supermarkets to make two 2p-a-litre cuts in the course of the month, winding back prices to a similar level they started 2017 at, and shaving up to £1.40p off a tank.
An average 55-litre family petrol car now costs £64.65 to fill up, with diesel slightly higher at £65.75.
RAC fuel spokesman Simon Williams said: “The low oil price that gave rise to fuel being sold for under £1 a litre in January 2016 was all driven by the Organization of the Petroleum Exporting Countries (OPEC) over-producing to lower the oil price and stop US fracking activity but every week now more fracking rigs are coming online.
“This is no doubt causing a major headache for OPEC. It must decide whether to cut production further and allow the US to gain more market share as the oil price rises or reconsider returning to over producing and lowering the oil price to make fracking less financially viable and keeping its market share, albeit at a reduced price.
“The strength of the pound against the dollar is also important as fuel, like oil, is traded in dollars, but having suffered a big drop in the value of the pound after the Brexit vote the new norm seems to be a pound that is consistently worth $1.24. The absence of any further significant downward movement should mean fuel prices will be mostly decided by the oil market.”
There was some variation in price, with Scotland enjoying the biggest drop in the price of both petrol and diesel with a fall of 2.9p a litre, ahead of the UK average of 2.6p. The North East has – for the second consecutive month – recorded the cheapest petrol and diesel prices in the UK with unleaded at an average of 116.50p and diesel at 118.53p at the end of March.
The South East continues to sell the most expensive fuel with a litre of petrol costing 118.38p and diesel 120.30p.