How Will Fuel Prices Change in the Second Lockdown?
Dec 02 2020 Read 296 Times
The coronavirus pandemic has sent shockwaves through the oil and gas market, with plummeting prices translating into big savings for motorists. Now, analysts are predicting petrol prices will fall once again before Christmas. Experts say the price drop will be triggered by a fierce competition between major petrol retailers such as Asda, Tesco and Shell. In the lead up to Christmas retailers have introduced significant discounts to entice motorists and pass on wholesale savings.
“We want to continue to support the nation during this second lockdown by passing on reductions in wholesale cost of fuel to our customers and 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,” says Asda senior fuel buyer, Dave Tyrer.
Retailers urged to pass on savings
RAC fuel spokesman Simon Williams supports the price drop, saying it’s important for retailers to pass on savings. Many were criticised earlier in the year when wholesale prices dropped but were not reflected at the pump.
“Since June when prices stopped falling as a result of the coronavirus movement restrictions being eased, the cost of fuel has been going up steadily, says Williams. “While price rises are never good news, they have not gone back to the high levels seen at the beginning of the year. Despite this, diesel drivers should feel short-changed by the decision of retailers to keep prices artificially high. This must surely be difficult for retailers to justify. We strongly urge them to lower their prices in an effort to restore drivers' trust.”
Chancellor warns of fuel duty rise
While motorists are hoping to pay less to fill up the tank, Chancellor of the Exchequer has warned that a fuel duty rise of between two to three pence per litre could be on the way. He has advised the increase would be introduced in the next budget and would play an important role in generating revenue for the government.
Despite justifying the fuel duty rise as a necessary measure for the greater good, Rishi Sunak has received heavy criticism for his proposition. Some critics have labelled the changes as “draconian” and say they come at a time when British motorists are facing economic instability. Rather than support British residents, critics say the increase will have a "disproportionate tax impact" and trigger nationwide economic damage.
From the novel coronavirus to new exploration projects, the oil and gas industry is continually shaped by global factors. Find out more about the latest innovations in ‘What’s happening on the surface?’ with insight from independent analytical consultant, Tom Lynch.
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