Diesel fuel drops below £1 per litre!
By now, I’m sure you are all aware of the drop in fuel pricing we have all seen as we enter 2016 – About time I hear you cry!
So clearly it is a great thing to finally have the price of fuel drop to a level we are all reasonably satisfied with but why did it happen?
In a nutshell, Iran is at the centre of this situation – With the threat of nuclear development, the EU, UN and US shut its doors on buying from their oil reserves in a bid to prevent them from continuing their ambitions of developing nuclear technology.
Most recently the restrictions have been lifted, allowing Iran to trade 500,000 barrels of oil each day, therefore flooding the market with crude oil.
This of course means the price is being driven down by competition.
We’ve all known for some time, the price of fuel was too high, and whilst we may think that 99 pence per litre is good – be prepared for it to drop by another 10-15 pence over the coming months as Iran continues to contribute its supply. We could see diesel being sold as low as 86 pence per litre
- Stock markets braced for heavy falls amid fears of a fresh slump in oil price.
- Follows lifting of sanctions against Iran which could see petrol prices drop.
- Speculation prices could fall as low as 86p a litre after the Iran nuclear deal.
- In wake of it Iran pledging to pump extra barrels a day to increase revenue.
- The price of diesel on British fuel station forecourts has dipped below £1 a litre as the falling oil price makes filling a tank the cheapest in years for Britain’s 11 million diesel drivers.
- Drivers of petrol cars have been enjoying sub-£1 prices since before Christmas, as the further fall in the price of crude oil filtered through to the pumps.
- An RAC representative said: “The wholesale price of diesel has been around 2p cheaper than the wholesale price of petrol since a couple of weeks before Christmas so we should have seen these cuts earlier and that is what the RAC has been calling for.
He added: “Saudi Arabia has also reiterated its intention not to cut oil production so the world will continue to be awash with oil as demand is also down, suggesting that sustained lower petrol and diesel prices are going to be around for much of 2016.”