Signal price

Gasoline costs expected to fall as wholesale prices drop slightly

Petrol and diesel prices hit a new record high on Wednesday before wholesale fuel prices fell 2 pence. Photo: Dan Kitwood/Getty

British drivers had a silver lining on Thursday as petrol prices could fall after lower oil prices pushed wholesale prices down slightly.

Global benchmark Brent crude (BZ=F) fell below $120 a barrel for the first time since May, which could finally bring prices down at the pump. It is currently down 1.2% at $117.12 a barrel.

US Light Crude (CL=F) also fell, down 1.1% to $114.04 at the time of writing.

Sustained price relaxation depends on wholesale prices remaining lower for several days or even declining, however, it takes time for these lower costs to trickle down to the forecourts.

Despite this, the cost of petrol and diesel again hit new records on Wednesday, with the average price of unleaded exceeding 187p per liter and diesel above 193p, according to the RAC.

It comes as the International Energy Agency has warned that supply will lag behind global demand as it forecasts oil demand to exceed pre-pandemic levels in 2023 after three years. of the COVID lockdown and the economic shock of the Ukrainian crisis.

Global oil demand is expected to reach 101.6 million barrels per day, with much of the demand growth expected to be driven by China as it emerges from lengthy pandemic shutdowns.

Read more: Ukraine war: Russia earns $20 billion from oil revenues in May

RAC fuel spokesman Simon Williams said: “Average prices at the big four supermarkets, where fuel has traditionally been cheapest, are now 182.64p for petrol and 190.10p for diesel.Although in response to dramatic increases in the wholesale market in recent weeks, retail fuel giants have raised the price of unleaded by 12p since the start of the month and diesel by nearly 10p, which naturally led to a similar trend with average prices in the UK.

“Fortunately there was a 2p a liter reduction in the wholesale cost of petrol on Wednesday which could signal that prices are finally stabilizing at the pumps. But it all depends on wholesale prices remaining at a similar level for several days or even drop.The wholesale price of diesel, however, continues to rise, which will undoubtedly accelerate its journey towards an average of £2 per litre.

“While, positively, the price of oil fell back below $120 for the first time since late May, the pound sterling fell to its weakest point since the start of the pandemic, which is not a good news because fuel is traded in dollars.”

Watch: Why Are Gasoline Prices Rising?