Plummeting petrol prices could give a boost to the North’s rural families and firms, business leaders say.
As oil prices continue to tumble and a supermarket price war helps lower the cost at the pumps still further, experts are predicting the cost of a litre of fuel could soon drop below £1.
“Falling prices are going to help families and businesses as it reduces overheads,” said Ted Salmon, chairman of the Federation of Small Businesses in the North East.
“A lot of small businesses use small vans and their own cars, and falling prices have knocked I think it’s £30 off the price of a tank of fuel - so every few visits to the pumps you’re effectively getting a free fill up.
“It will take a bit of pressure off and help businesses cash flow - it will help to keep money in businesses - and it will certainly help rural businesses who have to travel, and who’s customers have to travel.
“It could also help tourism come Easter time, with more people likely to drive to visit places.
“And while all of that might not mean extra jobs for the region, it could make the North’s businesses more resilient and help preserve the jobs we already have.”
World oil prices continue to plunge with some analysts predicting the cost of a barrel of crude could fall as low as $35 - down from $105 in July.
That has seen the average cost of a litre of petrol drop from an average of 131.6p to 112.6p a litre now that oil is $57 a barrel.
But leading supermarkets are pushing the price down further, with Asda, Morrisons, Sainsbury’s and Tesco all announcing this week that they were knocking a further 2p off a litre.
And that means that the cheapest fuel to be found on the North’s forecourts - at least on Friday - were are the grocery giant’s outlets.
The cheapest unleaded on Tyneside could be found at Asda’s Blyth and Sainsbury’s Sunderland stores, at 107.9p a litre. While on Teesside Morrisons Middlesbrough store, on Ormesby Road in Berwick Hills, and Tesco’s Dixon Bank and Ingleby Barwick filling stations were close behind at 108.9p.
For diesel the Asda’s in Thornaby, Middlesbrough, Hartlepool, Peterlee, Darlington, Blyth, Ashington and Spennymoor, plus Morrisons in Hartlepool, and Sainsbury’s in Sunderland all offered a litre for 114.7p.
However, information from PetrolPrices.co.uk shows it pays to shop around, with unleaded up to 8p a litre more expensive, and diesel up to 10p extra depending on the service station.
RAC fuel spokesman Simon Williams said: “What’s currently happening at the pumps with falling fuel prices is something many motorists will not remember seeing before.
“Talk of prices going up like a rocket and falling like a feather could not be further from the truth as retailers have been quick to pass on savings at the forecourt.
“The cost of going to visit family and friends will be the cheapest it’s been for nearly five years, but the prospect of petrol going below £1 a litre is incredible, particularly when prices at the beginning of 2014 seemed to be heading ever upwards.
“It is, however, important to realise that the oil and fuel market can always change due to a number factors, including the strength of the pound against the dollar and the global production of oil. If the current oversupply situation remains then it will clearly be good news for motorists and businesses that rely on the road network. With the United Arab Emirates energy minister saying OPEC will not cut production even if oil falls as low as $40 a barrel, we have every reason to think petrol at under £1 is a very real prospect.
“It’s also important to remember that while the cost of fuel itself has fallen, it currently only represents around a third of the overall pump price with the lion share being made up of fuel duty and VAT.
“At £1 a litre duty would be 57.95p and VAT 16.67p, leaving the cost of the oil and retailers’ margin at 25.38p – meaning tax would be three quarters of the forecourt price.”
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