Petrol prices will fall throughout January to catch up with the latest slump in the oil price
The supermarket petrol price war is set to intensify, as the "lower for much longer" mantra sweeps through global oil markets.
Oil has fallen around 15 per cent since all big four supermarkets – Sainsbury's, Tesco, Asda and Morrisons – slashed diesel prices to below £1 earlier this month.
"It takes two to three weeks for crude prices to make their way to the forecourt as this is the time it takes stocks to work through the system," Clive Black, head of research at Shorecap, told City PM
"As things stand … [petrol] prices are likely to drift lower through January."
Average unleaded prices have fallen 0.2 per cent to 102.50p since the start of this year, while average diesel prices have slumped 2.7 per cent to 103.21p, according to data from Experian Catalist.
The RAC told City PM supermarkets have room to cut diesel by around 2p a litre in the next few days, while unleaded prices are about right.
A Morrisons spokesperson said: “If oil prices continue to fall then we’ll continue to lead on cutting fuel prices.”
Oil prices have fallen around 70 per cent since June 2014, and a number of big investment banks recently downgraded their oil forecasts. Goldman Sachs and Barclays have warned oil could fall to $20 per barrel, while SocGen said it could slump to just $10.
The RAC said if oil falls to $20 then pump prices should come to around 90p a litre, if they fall to $10 then pump prices should come to 86p a litre.
This was echoed by Black who told City PM: "If oil remains under $30 per barrel then we should be looking at pump prices approaching 90p per litre."