‘Cheap fuel prices may have bottomed out’

Fuel prices may be as low as they will go as the price of oil shows early signs of recovery.

Fuel prices may be as low as they will go as the price of oil shows early signs of recovery. - Credit: PA

Motorists have been warned that the cheap fuel market may have bottomed out as the price of oil shows early signs of recovery.

The average price of diesel fell by 5p per litre to 101p last month, according to RAC Fuel Watch data.

Petrol prices dropped for the seventh consecutive month, down just over half a pence to 102p.

This was driven by oil reaching a 12-year low of 26 US dollars on January 20.

But since then the price has rebounded – finishing the month at 33 US dollars – which has caused the wholesale cost of petrol and diesel to rise again.

RAC fuel spokesman Simon Williams said: 'Motorists have seen petrol and diesel prices reach their lowest points since 2009.

'January saw the oil price go into free-fall with talk of a barrel dropping to 20 US dollars and possibly even to 10 US dollars, but since the low of 26 US dollars a barrel the market has started to creep back up.

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'If this continues for a sustained period, wholesale costs will rise further which will in turn lead to pump price increases.'

Mr Williams added that the oil market was 'notoriously volatile' and said it was still possible it could tumble again.

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