Further UK fuel cuts expected as pound strengthens

From tomorrow morning, Asda is reducing the price of its petrol by 1p to 119.7p a litre and also cutting its diesel by 1p to 123.7p a litre. Picture: Contributed

From tomorrow morning, Asda is reducing the price of its petrol by 1p to 119.7p a litre and also cutting its diesel by 1p to 123.7p a litre. Picture: Contributed

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DRIVERS will enjoy further fuel price cuts if the pound continues to strengthen against the dollar, the AA predicted today after price-leader Asda cut petrol to its lowest for four years.

Rival supermarkets swiftly matched Asda’s 1p a litre cut from tomorrow, which will reduce its unleaded price to 119.7p a litre.

The reduction means Asda petrol will be 7p a litre cheaper than six week ago. Diesel will also be cut by 1p, to 123.7p - a 6p reduction over the same period.

The moves came as fuel campaigners and motoring groups criticised the UK Government for warning retailers it would be “watching very carefully” to ensure the fall in oil prices was passed on to motorists at the pumps.

AA spokesman Luke Bosdet said: “We saw a couple of Esso petrol stations east of London had broken below 120p a litre earlier this week and wondered when Asda might move in that direction.

“They’ve done that now, which makes it the target for bargain-value fuel.

“Further price moves are largely dependent on the value of the pound.

“It’s worth around $1.60 now, but a mere 10 cent lift to $1.70 would lop a further 2p a litre off the pump price.”

Brent crude slumped to 82 dollars a barrel earlier this week - the currency it’s traded in - which is its lowest level in just over four years.

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Chancellor George Osborne said: “Our message today is very clear - the oil price has fallen, we expect that to be passed on to people at the petrol stations as they fill up their cars.

“We expect the oil companies to do this and we will be watching very carefully to make sure that they do.”

Chief Secretary to the Treasury and Highlands MP Danny Alexander said the UK Government had cut and then frozen fuel duty to help motorists and now it was time for the industry to take action.

Visiting Aberdeen, he said: “Now that we see global oil prices falling, we need make sure that those prices are passed on at the pumps.”

However, the Petrol Retailers Association (PRA), which represents independent retailers, hit back at Mr Alexander.

Chairman Brian Madderson said: “The PRA has been trying for weeks to get a meeting with a Treasury minister to discuss the whole issue and they have failed to agree to a meeting, so therefore to criticise the industry without speaking to us is grossly unfair.

“The Competition and Markets Authority recently looked at the industry and made no comments on prices, and an investigation from the Office of Fair Trading (OFT) found there was very little evidence to suggest that petrol and diesel prices rise quickly when oil prices go up, but are slow to fall when prices drop.”

RAC Foundation director Professor Stephen Glaister also criticised the UK Government.

He said: “It is encouraging that Mr Alexander shares the concerns of the nation’s drivers, but in a way he is passing the buck.

“The biggest driver of pump prices remains the Government.

“Well over 60 per cent of the price is tax. And that share could rise sharply with the reintroduction of the fuel duty escalator.”

Campaigners FairFuelUK called on Mr Alexander for an inquiry into petrol prices by the OFT and a 3p cut in fuel duty.

It said: “His call for oil companies and retailers to lower prices today is a bit rich and opportunistic when the Government already takes over 62 per cent in tax.”

SEE ALSO

• The No vote in Scotland could result in a 2p-a-litre dip in fuel prices at the pumps, according to the AA

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