Petrol prices drop below 175p a litre with further cuts expected

Charlie Stayt and Dominic Raab clash over petrol prices

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Experian Capitalist confirmed that average petrol prices have fallen to 174.79p per litre. Diesel has not fallen as quickly, with drivers seeing average prices for a litre at 185.4p.

The 16.5p fall since petrol reached an all-time high of 191.53p a litre on July 3 is only halfway towards where pump prices should be heading this month.

Wholesale costs have fallen by 30p a litre, having peaked at the beginning of June, and that is without including the VAT savings.

Since the record-breaking prices, prices have dropped by 16.5p per litre, meaning that it will cost an average of £9.08 to fill a car.

For two-car families who rely heavily on their cars and perhaps do two 50-litre refills a month, the 16.5p reduction potentially returns £396 a year to the family budget.

This is the first time prices have fallen to below 175p since the Jubilee weekend at the start of June.

In Northern Ireland, the Fuel Price Checker has fired up price competition between retailers.

The Checker has indicated that at least one fuel station in Belfast has broken below the 160p a litre mark.

The AA says that this is where the UK average should be heading in the coming weeks.

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On Wednesday, petrol averaged 175.24p a litre, having been 179.80p a litre a week ago and 135.30p a litre this time last year. 

In comparison, this time last week, diesel averaged at 190.01p a litre and 136.56p a year ago.

Luke Bosdet, the AA’s pump price spokesperson, said the price drops were welcomed, but costs should be reduced more quickly.

He added: “Lower pump prices are taking the strain off family budgets at present and that benefit should eventually double to at least 30p a litre off the peak price of petrol in July. 

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“However, increases in domestic energy prices are likely to overwhelm those savings heading into the winter. 

“That is why the UK needs the fuel trade to pass on the savings as quickly as possible. 

“The 20p-a-litre fall in diesel wholesale costs should also be contributing to lower transport costs that will hopefully roll back some of the inflation on goods and services.”

The AA also pointed out that each 5p in wholesale cost brings a further 1p in VAT.

Because of this, it predicts that petrol should fall “at least 30p“ a litre below its early July peak.

The full 30p-a-litre wholesale cost reduction has the potential to cut those families’ annual petrol bill by £720. 

Factoring in the VAT aspect of lower costs makes that £720-a-year saving more likely for more families around the UK.

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