The supermarket chain Morrisons was the first the cut diesel prices to below £1 a litre on Sunday and the other three big supermarkets also dropped prices on Monday.
Petrol, which is usually cheaper than diesel, was reduced below £1 a litre in the weeks before Christmas and these cuts show the further falls in the price of oil. Asda currently has 277 filling stations and said that it was the first supermarket to cut the price of petrol to below £1 a litre in November. Morrisons also stated this.
The price of oil is at its lowest for 11 years and Morrisons’ cuts were its cheapest since 2009. UK Brent crude oil is trading at just below $38, which is £26 per barrel. This means it lost 35% over the year.
About 75% of the price of UK fuel goes to the Treasury in duty and VAT and the remainder goes on refinery costs, distribution and the fuel retailers’ profit margins.
According to the motorists’ organisation, the forecourt price should have been cut earlier seeing as the wholesale price of diesel has been 2p lower than the wholesale price of petrol. This started a couple of weeks before Christmas and the organisation stated that more miles were driven in the UK on diesel than petrol.
Sainsbury’s is charging slightly more at 99.9p per litre whereas Morrisons, Asda and Tesco are charging 99.7p.