Simon Williams, at the RAC, said the further fall in oil prices means drivers can expect more cuts to fuel costs at the pump in the coming weeks.
He added: “A relatively low oil price, caused by lower demand globally, and a relatively strong pound are the two factors that are contributing to pump prices falling. We believe there is scope for pump prices to come down further in the next few weeks to reflect the lower wholesale costs retailers are paying when they buy fresh fuel stocks.”
However, experts warned prices were at risk of rising again with the Conservative government’s temporary 5p cut to fuel duty poised to expire in the spring.
Edmund King, president of the AA, urged Rachel Reeves, the Chancellor, not to use lower prices as an “excuse” to launch a tax raid on drivers in next month’s Budget.
“Although prices are lower now and have fallen, we do not want this to be an excuse for the Treasury to hike fuel duty,” he said.
“Fuel prices fluctuate erratically due to world events. It is good for drivers at the moment, but it is not guaranteed to last. The Treasury can use it as an excuse, then who knows, two weeks later the global price may increase again and it is a double hit to drivers.”
Lower petrol prices will also play into global politics, as the cost of living is a major factor in the US election campaign. The Democrats have been blamed by Republicans for high inflation in recent years, and so potentially stand to benefit from lower fuel prices in the States.
However, the US is also now a net energy exporter thanks to the fracking boom, so lower prices risk harming some parts of the American oil and gas industry.
