Oil prices plummet sparking calls for constant pump hikes to stop hitting drivers | City & Business | Finance
After reaching highs of over $130 (£99.59) a barrel in recent weeks, the price of oil today dipped back below the $100 threshold. Victoria Scholar, Head of Investment at Interactive Investor, said: “Brent crude has now reversed all of its March gains and is on track to break below psychological round number support at $100 a barrel. The possibility of softening demand from China and an end to the tensions between Russia and Ukraine suggest that supply and demand could start to come more into balance.” Demand from China suffered after major cities were put into lockdown due to Covid outbreaks and fears of a slowing economy following the restrictions.
RAC fuel spokesman Simon Williams said that the latest plunge in costs should be felt by British drivers fatigued by frequent price increases.
He said: “Drivers should be encouraged by oil and wholesale prices dropping again yesterday.
“It’s now vital that the biggest retailers who buy fuel most often start to reflect these reductions at the pumps to give drivers a much-needed break from the pain of constantly rising prices.”
According to the AA, wholesale petrol prices have plummeted by 12.8p a litre since Wednesday however latest pump prices showed another rise with average unleaded prices reaching 163.71p a litre on Monday.
Gordon Balmer, Executive Director of the Petrol Retailers Association (PRA), explained the global nature of the events involved made it “difficult to predict where prices will go next”, pointing out record pump prices remained across most western economies.
The PRA has written to Chancellor Rishi Sunak ahead of next week’s Spring Statement urging the Government to cut fuel duty in order to bring costs down.
Mr Balmer said: “Our members have done what they can to alleviate the increases, but the speed of which prices have moved has been unprecedented and has left many forecourt operators with negative fuel margins.”
According to the group, fuel operators are also having to make costly investments in new infrastructure to meet the Government’s Net Zero strategy
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Calls for a cut to fuel duty have attracted widespread support with Mr Bosdet saying reductions are well overdue.
He said: “Such has been the huge rise in fuel prices recently, a temporary drop in fuel duty would help struggling UK families, lower-income workers, young drivers and pensioners.
“It would also relieve some of the inflationary pressure on businesses.”
The Government received further warnings on fuel prices on Monday with MPs on the Treasury Committee being told current prices were the “lull before the storm.”
Nathan Piper, head of oil and gas research at Investec, told the Committee tougher sanctions on could see much bigger price rises to come.
“If more stringent actions are imposed upon Russia, and five million barrels a day is truly taken out of the market, then oil prices would really have no ceiling” he explained.
