OPEC wants a ‘fair price’ for fuel after record low

A new 12-month oil low of $41.87 in the last week of August helped to bring the average price of petrol down by 4p a litre for the month to 112.42p, according to the latest RAC Fuel Watch data.

Diesel also continued to drop throughout August with a further 5p being shaved off a litre taking the average cost down to 110.40p, still keeping it below petrol. This means motorists are now paying £2 less to fill up an average family-sized petrol car than they were at the start of the month and £2.60 less for a diesel car.

The fall in pump prices has been driven by a dramatic reduction in the price of oil. In the run-up to August, oil was at a consistent $60 a barrel, but dipped below $50 a barrel at the start of the month and stayed below $50 for the whole month, reaching a low point of $41.87 on 24 August.

RAC fuel spokesman Simon Williams said: “We thought July had been a good month for motorists but August proved to be better still due to world oil prices reaching their lowest since February 2009.

“In January, we saw oil go down to $45 but then recover to around the $60-a-barrel mark where it stayed for several months until this new level of over-production in August led to a dramatic reduction.

“Diesel drivers have benefitted the most this summer due to a new supply of diesel from Saudi Arabia bringing the wholesale price down.

“They are now paying £5.60 less to fill up than they were at the beginning of July whereas the savings for petrol motorists have only just kicked in with the drop in the price of oil feeding through into lower wholesale and retail prices.

“The good times at the pump may, however, be coming to an end as OPEC – the Organisation of the Petroleum Exporting Countries which produces 40% of the world’s oil – has said it is willing to meet with other oil producers to discuss a ‘fair’ price for oil.

“The barrel price has already rebounded and is continuing to trade up around $48 so we may not see a low of $41 a barrel again.

“Due to the global oil over-supply situation we are in, pump prices look unlikely to return to the all-time high levels of 142p for petrol and 147p for diesel experienced in April 2012 so the cost of driving should continue to be cheaper for some time to come.”

HMRC oil duty statistics for July show fuel sales were 1.6% down on June with a 2.4% drop in the number of litres of diesel sold from 2.494bn to 2.433bn.

Petrol sales were static at 1.472bn litres, however, compared to July 2014 combined fuel sales were 3.5% up – 2.3% for petrol and 4.3% for diesel.

Shows 3-month, 6-month and 12-month price and percentage change to 28/08/15

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