Last week, we reported on the top five hardest hit areas for increased petrol and diesel prices, after May saw the steepest price hike for 18 years. PetrolPrices reported that, in some places, motorists paid between 7.5-7.7 pence extra on a litre of fuel, despite the wholesale cost falling.

This week, there’s good news for motorists as news came of supermarkets reducing their fuel prices in what some are describing as a new ‘price war’.

Why have prices dropped?

The drop in the wholesale price of fuel is due to rumours that oil-producer Opec will lift the restriction on production and the increased level of drilling and oil production by the US and Russia.

Even though the wholesale price of fuel has been 2.5 pence lower since the 24th of May, motorists hadn’t seen the reduction in price reflected at the pumps until Asda took the lead, cutting their pump prices last week by up to 3p a litre.

Due to the supermarket setting a price cap across all its forecourts, drivers can expect to pay up to 125 pence per litre for unleaded and 128 pence per litre for diesel across any of Asda’s 318 forecourts. A price cap merely limits the top price rather than setting a fixed price across all forecourts.

Tesco, Morrisons, and Sainsbury’s have followed Asda’s lead and have cut their forecourt prices, too. Unfortunately, we’ll have to wait to hear any announced cuts from other retailers although motorists may notice a slight drop over the next few days.

Did the price actually change?

On the day the news broke that Asda was slashing their prices — Wednesday the 13th of June — their petrol prices were 128.9 pence per litre, yet two days later it was up to 132.3 pence per litre, only to come down to 128.2 pence per litre three days afterwards. Diesel got cut from 134.9 pence per litre to 132.4 pence per litre.

Sainsbury’s was charging an average of 129.8 pence per litre last Wednesday. Since then the price has come down to 128.9 pence per litre. Yet diesel is up from 130.9 pence per litre to 132.2 pence per litre.

At Morrisons, petrol came down from 132.9 pence per litre to 129.1 pence per litre, but their diesel price went up from 131.9 pence per litre to 132.6 pence per litre.

Tesco’s pump prices have gone up — though Tesco said they’ll cut them. Their petrol increased from 130.5 pence per litre to 130.8 pence per litre. Diesel too increased from 132.9 pence per litre to 133.6 pence per litre.

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Welcome relief

After the RAC described May’s rise in fuel prices, as “a hellish month for motorists”, their Senior Press Officer, Rod Dennis, said: “At last, retailers have done the right thing and started to cut prices at the pumps. From our data, we could see no justification for them holding on to savings that they have been benefiting from for three weeks.

“With petrol prices rising at their fastest rate in 18 years last month, millions of households and businesses will have been feeling the effect of having to spend more on what is an essential purchase for many.

“Today’s cuts should bring some welcome relief. It is absolutely right that at times when wholesale prices are falling, forecourt prices follow suit.”

Roger Burnley, Chief Executive for Asda, said: “We know that the cost of living is centre of mind for our customers and we will always do whatever we can to reduce that burden.”

Although the price cut is welcome news to drivers, many will be cynical. After such a hike in recent prices, a cut of 2-3 pence on a litre isn’t much to celebrate. Other drivers will be angry it’s taken so long for forecourts to pass on the savings; three weeks after the wholesale price of fuel dropped.

With petrol and diesel often in the top three of a household’s biggest budget expenses, is this price reduction enough?

Getting the most from your car

With more of UK motorists saying fuel prices are making car ownership more prohibitive by the year, what can the average driver do to reduce what they pay out in petrol and diesel costs?

PetrolPrices is on a mission to save motorists money. We collect around 8,000 price updates each day, covering 98% of the UK’s fuel market. If you want to cut your fuel cost by, on average, £220 a year, become a PetrolPrices member by downloading the app, today.

Be on the alert of supermarkets offering discounted fuel vouchers at the till, for use at their own pumps. This can shave off a fair amount on a full tank of fuel. Often, both supermarkets and other fuel retailers also have loyalty card schemes. Every time you fill up your tank, you collect points, which you can use for later purchases of fuel.

If you always pay off your credit card balance each month, consider one that gives you cash back when you use it at petrol stations. Beware though, if you carry a balance on your credit card — the interest will cancel any savings made.

The faster you drive, the faster you consume fuel, so try to leave plenty of time before making journeys, to prevent being rushed. Figures by The Department for Transport show drivers use up to 25% more fuel travelling at 80mph instead of 70mph and 9% more fuel driving at 70mph than at 60mph.

The most fuel-efficient way to drive is smooth. This means being gentle with the accelerator, brakes, and steering — it’s a more relaxing way to drive, too. By focussing on the distance, you can better tell what will happen, adjust your driving, and maintain your flow.

What do you think about this so-called ‘price war’? Will the price cuts make a real difference to you or isn’t it enough of a reduction? Do you see the competition between fuel retailers driving the prices down further? Let us know in the comments.

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