Petrol prices are expected to finally dip below the £1 per litre mark within the next few weeks, the first time that it’s happened in six years.
According to the RAC, the tumbling cost of crude oil will start to filter through to forecourts in the coming month, egged on by price wars between supermarkets and other fuel stations.
At present, unleaded petrol costs an average of £1.07 per litre, however with some forecourts selling it at 4p less than that, it’s predicted that wholesale prices could start to fall below £1.
Typically, there’s a two-week lag between a dip in the price of crude oil and savings passed on to customers, so the drop in crude prices aren’t expected to benefit consumers just yet.
Regardless, the RAC believes that there is “a very good chance” that garages will be selling fuel at £1.01 within a week or two, before knocking off the extra penny to gain an edge over competitors.
Simon Williams, RAC fuel spokesman, said: “With oil prices already consistently low as a result of too much supply, the dip - even though it will be temporary - should still be reflected in wholesale prices, making fuel cheaper for motorists.”
According to a report from the Centre of Economics and Business Research (CEBR), the fall in fuel prices has already significantly boosted the UK economy, and it’s set to get even better.
The CEBR claims that lower costs at the pumps have raised the country’s GDP by between 0.5 and 0.6 per cent, with the dip in crude oil costs also resulting in lower prices for some goods.
If sustained, this increased in economic activity could help to create around 121,000 jobs, and will also provide increased investment opportunities for businesses based in the UK.
The report states: “Our previous analysis has shown the savings that falling fuel prices have brought to consumers and businesses.
“Here we extend this analysis to show that falling oil and fuel prices have provided a considerable boost to the UK economy over the past year.”
