Morrisons, Asda and Tesco have cut unleaded fuel prices to below £1 a litre, reflecting the recent crash in oil prices, but experts are already warning higher pump prices are on the cards.

Morrisons led the latest round of fuel cuts

The pricing war was led by Morrisons, which announced yesterday (10 May) that it was cutting the maximum fuel price at all its filling stations, bringing unleaded to under £1 at 99.7p per litre and reducing diesel to 104.7p per litre.

The FairFuelUK campaign group said the “honest milestone” was way overdue, but warned that with oil rising 50% in the last week it’s unlikely this price will be with us for long. It also said that average UK filling up costs are still 8-12p per litre higher than necessary, showing the “Covid-19 fuel supply chain rip-off of motorists is still running amok”.

The RAC said the price drop was fair and much more reflective of what the retailer is itself paying to buy the fuel in, but reiterated concerns over how independent fuel retailers would cope in the face of drastically declining fuel demand during the lockdown.

Fuel spokesman Simon Williams said: “There is a darker side to any large price cuts – they heap yet more pressure on smaller independent fuel retailers, who in some cases are already fighting for survival as a result of the coronavirus outbreak.”

Williams also warned the reduction may be short-lived.

“It remains to be seen how long prices this low will persist for, with some early indications that wholesale petrol prices have started to rise as a result of the world oil price creeping up,” he explained.