Asda has cut the price of petrol by 2p-a-litre and diesel by 3p in the run-up to England going into a second lockdown.
The supermarket giant is reducing its pump prices at 322 filling stations across the country from today in response to falling wholesale costs.
It means those who will be working from home from Thursday and adhering to government rules have just two days to fill the tanks of their cars before the restrictions.
Fuel price experts have told us a repeat crash in fuel prices, which saw petrol drop below £1-a-litre for the first time in four years during the first coronavirus lockdown, is unlikely,
Fuel prices reduced ahead of lockdown: Asda has cut the price of petrol by 2p-a-litre and diesel by 3p, giving some drivers in England just two days to fill up with cheaper fuel
From today, drivers filling up at the supermarket chain will pay no more than 108.7p for unleaded and 111.7p per litre for diesel.
Dave Tyrer, Asda senior fuel buyer, said: ‘We want to continue to support the nation during this second lockdown by passing on reductions in wholesale cost of fuel to our customers.
‘We hope this will provide some additional support to those essential workers, such as NHS staff and key workers who are still required to make essential travel journeys to and from work.’
Fuel experts say there has been little incentive for retailers to cut prices in the last three months, with wholesale petrol barely shifting since July.
However, last week saw oil prices fall by almost $4-a-barrel, which – if savings were to be passed on by retailers to consumers – would usually see pump prices fall by around 2p-a-litre.
The falling oil price is as a result of ongoing concern about global demand as the second coronavirus wave continues to impact on trade and travel.
In the shorter term, the result of the US election may also have some effect on prices, although analysts seem split on whether it could mean prices end up slightly higher or slightly lower, depending on who gets elected.
Luke Bosdet, AA’s fuel price spokesman, said: ‘Only last week did the cost to the trade fall significantly and the speed with which Asda has slashed its prices is what makes it stand out as the leading supermarket for cheap fuel.’
Fuel prices have remained relatively stable over the last few months, with wholesale costs flat-lining since July
A repeat lockdown fuel price crash is unlikely
He added that motorists are unlikely to see fuel prices crash at the same rate they did when the Government imposed the first lockdown in Britain from the end of March.
This was caused by a price war between Saudi Arabia and Russia when the latter refused to reduce oil production, which saw oil prices fall by 65 per cent.
Oversupply came at a time when demand hit an all-time low, with road traffic levels dropping by as much as 80 per cent in the UK as people were ordered to stay home to prevent the spread of Covid-19.
In the UK, petrol fell below £1-a-litre for the first time since 2016, and many rural retailers faced closure due to the huge fall in sales.
However, with different measures imposed on people in England from Thursday, the AA’s fuel price expert said it is unlikely motorists will see a repeat of this in the next month.
‘Although traffic will fall with a second lockdown, there are significant numbers of people who will need to use their cars: school runs, students to their colleges and universities, workers who can’t work from home or their workplaces are now covid secure and, of course, NHS and other emergency service workers,’ Bosdet said.
‘In the last lockdown, many fuel stations held back savings from lower wholesale prices because they said they needed to compensate for lower fuel demand.
‘Asda’s price cut throws down a challenge to other fuel retailers to do the right thing and, this time, charge a fair price for petrol and diesel.’
The RAC has urged rival retailers to follow in the steps of Asda and cut prices as quickly as possible so drivers in England can benefit before going into lockdown last this week
RAC fuel spokesman Simon Williams said drivers are likely to experience ‘a case of déjà-vu’, with fuel prices once again starting to fall just at the point when we’re all driving less as a result of a coronavirus lockdown.
‘It’s good to see Asda leading the way this morning with an initial price cut and we now need other retailers to follow suit as quickly as possible,’ Williams told This is Money.
‘While we’re not expecting prices to go as low as last time – March saw petrol prices under £1-a-litre as a result of oil prices falling to a 21st century low – any driver needing to fill up later in November should be greeted by the sight of lower prices, if retailers do the right thing.
However, like the AA, Williams was also skeptical of retailers passing on savings to motorists as urgently as they possibly can.
‘While the volume of fuel sold in the coming weeks is likely to be lower than of late, we’re concerned some retailers may only choose to only cut by a few pence, or not at all, which would be bad news for drivers, especially as we don’t anticipate the roads will be as quiet as during the first lockdown,’ he added.
‘There is perhaps a cruel irony for motorists here in that the route to cheaper prices is cheaper oil, yet the main reason the oil price is lower is because so many of us across the world aren’t travelling.’
Williams said that drivers of diesel cars in particular have ‘reason to feel particularly hard done by’, as arguably they have been paying over the odds for the fuel for two months.
‘We strongly urge retailers to lower the price of diesel, both for businesses and the country’s 12 million-plus diesel car drivers.’
Motorists across Britain continue to be advised to wear gloves while filling up.