Diesel falls 5p a litre in July as retailers pass on wholesale price savings

The average price of diesel at the pumps fell 5p a litre as retailers passed on the savings in the cost of wholesale diesel, which has been below that of petrol since the end of May.

RAC Fuel Watch data for July shows that at the start of the month diesel was 120.63p, but by the end it had dropped almost 5p to 115.74p.

And, on Wednesday 29 July the country saw the first forecourt price flip between diesel and petrol since summer 2001 with diesel at 116.28p, just below the average petrol price of 116.64p.

Half a penny a litre also came off the petrol price in the month, which reduced from 117.05p to 116.51p.

Both petrol and diesel wholesale prices remain low as a result of the price of oil falling below the $60 a barrel mark on 3 July and remaining there ever since.

In the course of the month, the oil price fell 9% from $61 to $52 a barrel. This combined with the pound staying strong against the dollar at $1.56 is keeping petrol and diesel cheaper.

RAC fuel spokesman Simon Williams said: “July was a month of good news for motorists with diesel vehicles.

“The 5p a litre diesel saving recorded in July means the cost of filling up an average 55-litre diesel family car, such as a Ford Focus, has dropped by £3 in a month. This is particularly welcome for motorists setting out on their annual holidays who are driving long distances to destinations in the UK.

“And, if the supermarkets continue to battle over prices as they pass on further wholesale cost savings, pump prices should reduce to around an average of 111p a litre – a price last seen in January 2010. This would shave another £2 off a tank of diesel.

“To put this in perspective, this is even lower than the 113p average price reached in January after oil hit a near six-year low of $45 a barrel.

“The cheaper wholesale price of diesel – now almost 6p a litre cheaper than petrol – has been brought about by the fact two new refineries in Saudi Arabia are now producing diesel to meet the large European demand.

“We expect this to be good long-term news for the nation’s 10.7m diesel car drivers as well as for businesses operating commercial vehicles.

“Everyone should benefit from a better, fairer deal at the pumps going forwards.”

HMRC fuel usage statistics for June show 2.5bn litres of diesel were sold – a 4% increase on May. Petrol sales remained static at 1.5bn litres. Compared to June 2014; however, petrol was down 4% and diesel was up 5%.

Combined fuel sales generated £2.3bn revenue for the Government in fuel duty. This was 2.5% up on May and 1.4% up on June 2014.

How has the price of fuel changed during July?

How have things changed over the last 3, 6 and 12 months?