Supermarkets start cutting petrol prices

Supermarkets are cutting petrol prices after oil fell steeply in the past week – putting energy suppliers under pressure to lower household fuel bills Drivers have begun to benefit from cheaper fuel after falling oil prices started feeding through to lower pump prices. Household energy bills could also come down. As Brent crude fell below $100 a barrel for the first time in six months, Asda, Tesco and Morrisons began cutting petrol prices and analysts forecast that wholesale gas prices would follow. Analysts including Eliane Tanner, of Bank Sarasin & Cie, predicted that the price of oil, which hit $126 a barrel in April, could fall as low as $80 in the coming months as concerns about US and European debts raised the prospect of a double-dip recession. Such a decline would drag down the wholesale price of gas – which is closely aligned to oil – increasing the pressure on energy providers to reduce gas and electricity prices. Omar Rahim, editor of the Energy Trader Daily, predicted that wholesale gas prices for the season ahead, already 8% down on June levels, could decline by up to a fifth in the next few months. Falling oil and gas prices came after E.ON on Friday became the fourth of the “big six” energy providers to raise gas and electricity bills, by 18.1% and 11.4% respectively, blaming a 30% rise in wholesale gas prices this year. Although wholesale energy prices have risen significantly this year, they are still down about a third from their peak in 2008, while average domestic energy bills have risen to record levels. Asda is cutting its pump price by 2p a litre to 132.7p, while Tesco will reduce prices by 1p a litre. However, at an average of 136.58p-a-litre petrol is still less than a penny cheaper than the record of 137.43p on 9 May this year. Luke Bosdet at the AA said recent falls in the oil price – down nearly 8% this month – meant that in theory, petrol prices should be coming down. He noted that wholesale prices fell particularly sharply in the first five days of August and pointed out that such moves typically take about 10 days to feed through to the pump. Adam Scorer, director of external affairs at Consumer Focus, said: “Consumers will question whether they’re getting a fair deal if prices don’t come down as quickly when costs fall as they go up when costs rise.” He said: “Decreases in oil prices should be reflected in the costs passed on to consumers at the petrol pump and any fall in gas prices should lead to cuts in the prices customers have to pay to heat their homes.” Brent crude fell by more than $5 to $98.74 a barrel on Tuesday morning, its lowest level since February, before rebounding to $104.64 by the evening as markets put the sell-off on hold. While the outlook is uncertain, the market consensus is that the price will fall in the coming months, in line with the economic forecast. “Oil and other commodity prices are going down because of rising risk aversion and the economic slowdown. The role of speculators is not fully understood, although it seems likely that they have had also some impact on oil prices,” said Tanner of Bank Sarasin. “Low oil prices are good for the economy because they make things like [petrol] cheaper and leave people with more money to spend on other things. Oil prices are correlated to other commodities, such as base metals like copper,” Tanner added. Gold hit a fresh high, breaching $1,780 an ounce as increasingly risk-averse investors continued to use the precious metal as a safe haven. In the US, the price of West Texas Intermediate oil fell to $75.71 before bouncing into positive territory on hopes that the Federal Reserve was preparing another fiscal stimulus. West Texas Intermediate and Brent crude typically trade at different prices because they are different grades and different destinations. Oil Petrol prices Energy bills Oil and gas companies Tom Bawden Julia Kollewe guardian.co.uk

Posted by on August 9, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.