Drivers could see petrol prices fall below 150p a litre within days as the cost of oil tumbles to levels not seen since before the US and Israel went to war with Iran at the end of February. Brent crude has dropped below $73 (£55) a barrel, around where it stood before the conflict erupted, after traffic through the key Strait of Hormuz shipping route gradually resumed. The fall is expected to feed through to pump prices, offering relief to millions of motorists who have faced soaring costs since the war began.
Simon Williams, head of policy at the RAC, said: “On the back of the lowest oil price since before the Iran war started, drivers should see the average price of petrol fall below 150p in the next week or so. If this happens, unleaded will be at its lowest price since March 26. Diesel, having dropped below 170p for the first time since March 22 as shown in the Government’s Fuel Finder data, ought to go back under 160p."
“Petrol prices could drop below 150p next week as oil falls to pre-war levels, offering relief to drivers.”
The national average for petrol has already fallen by 7.2p a litre since peaking on May 28 at 159.53p, while diesel has tumbled by 22.17p since its high of 191.54p on April 15. The drop will dent the Treasury’s coffers after price spikes delivered a tax windfall, but the benefit may be offset by lower spending elsewhere as motorists struggle to make ends meet. Falling fuel prices should also begin to feed through to inflation.
Edmund King, president of the AA, said: “While drivers have been pleasantly surprised by the speed of price falls at the pump, there is some way to go before prices return to where they were before the outbreak of the war.” He warned that some drivers fear “prices could go the other way” because of “uncertainty” over future US and Iranian actions, but added: “The hope is that pump prices continue to tumble with the summer getaway late in July now coming into view.”
US Energy Secretary Chris Wright told a forum that flows through the Strait of Hormuz were close to pre-war levels, with at least 20 million barrels having exited the waterway in the last 24 hours. He said normalisation would take a few weeks because the strait needs to be demined. Before the war began, Brent crude stood at $70 a barrel, translating to an average petrol price of 132p and 141p for diesel – a level still far off for motorists hoping for lasting relief.