Wholesale petrol costs are at their lowest level since 2016 as the Coronavirus outbreak knocks global demand for oil. The dramatic decrease has already seen forecourts across the UK reduce costs for motorists but RAC experts say costs could continue to fall based on the savings made by retailers.
Experts predict the gap between what retailers are paying for oil and the price customers are paying is now at one of the widest margins ever seen.
The RAC claims retailers could be overcharging customers as much as 12p per litre for petrol and 9p per litre for diesel.
The motoring group has called for supermarkets to make drastic cuts as soon as this week to accurately reflect the overall wholesale costs.
RAC fuel spokesman Simon Williams said: “The oil price has fallen dramatically as a result of several major oil-producing countries ramping up supply at a time when demand is reducing due to the coronavirus outbreak.
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“This has led to wholesale petrol prices dropping to their lowest levels in four years and means there is now enormous pressure for pump prices in the UK to drop significantly, by around 10p a litre from where they are today.
“A drop of this size would see average petrol prices fall to 112p per litre, and diesel to 115p per litre, and we’d expect supermarkets to sell the fuels for as little as 108p and 111p respectively.
Wholesale oil prices have plummeted due to the declining consumption and demand of petrol and diesel due to Coronavirus pandemic.
The RAC also claims the reduced costs are a result of global oil suppliers failure to find a solution to limit production during the course of the crisis.
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Simon Williams claims retailers now need to cut fuel pump costs considerably to save motorists money during the crisis.
The group estimates bringing costs back into line with wholesale prices could save the average driver over £5 at the forecourts.
It currently costs £67 to fill a 55-litre car up with petrol but this could be reduced by as much as £5.40 under the proposals.
Mr Williams said: “All eyes are now on the UK’s fuel retailers, large and small, to cut fuel prices considerably, and fast.
“It is vital drivers are given a fair deal and retailers accurately reflect the lower wholesale prices at their forecourts.”
The AA have warned the motoring group and other competitors would likely write to the competition authority if prices refused to fall.
Campaigners at Fair Fuel UK have previously lobbied for changes to retail costs after claiming wholesalers and oil companies “fleece” motorists.
Over 95 percent of FairFuel supporters claim to want an independent body created to prevent retailers from hiking forecourt prices
Data from the Department for Business, Energy and Industrial Strategy has revealed pump prices have fallen for the sixth week in succession.
Average petrol costs now stand at 122.24 pence per litre in a reduction of over 5p per litre in just two months.
Diesel costs were also down from 132.88 pence per litre in January to 126.25p per litre this week.
However, costs could still reduce further with the RAC’s Fuel Watch tool estimating costs are very likely to come down.
Just months ago, RAC experts predicted the coronavirus outbreak would have a drastic effect on pump prices.
They warned a fall in demand for the global production of oil could see costs plummet across the country.