Falling Prices: Experts say oil may become cheaper than bottled water

Monitoring experts has said fuel may end up being cheaper than bottled water if the current rate at which oil prices are plummeting continues.

Oil prices have gone down by 30% since early December, with Brent crude briefly falling to below $30 a barrel on Wednesday to a new near 12-year low.

According to analysts, the trend may become worse, with Standard Chartered bank warning a figure of $10 a barrel is possible.

This could lead to UK motorists paying just 86p per litre for fuel, as long as the pound does not continue to weaken against the dollar, according to the RAC.

The glut of oil being pumped out by the US and other producers, combined with slowing world demand from the likes of China, has weighed heavily on the price of oil and other commodities.

A section of the BP Eastern Trough Area Project oil platform is seen in the North Sea, around 100 miles east of Aberdeen
Play video “BP Slashes 600 Jobs”

The worldwide slump puts more money in consumers’ pockets.

But it has badly damaged oil companies such as BP – which is a mainstay of many UK pension funds – as well as a wider spectrum of firms that supply parts and services to the industry.

Some supermarkets cut petrol last month to under £1 per litre for the first time since 2009 – excluding promotions – while there were similar moves for diesel last week.

Average prices across the country are 102.5p per litre for petrol and 103.2p per litre for diesel.

RAC fuel spokesman Simon Williams said: “Breaking through the pound a litre price point for both petrol and diesel was clearly a welcome landmark, but it looks as though there is more to come.

“In fact we may get to a bizarre time when a litre of fuel is cheaper than a litre of some bottled waters.”

The motoring organisation claimed that diesel should have already been cut even more given current oil prices.

“Retailers still need to pass on more wholesale price savings on diesel to motorists at the pump, as the wholesale price is still 3p a litre cheaper than that of petrol,” Mr Williams said.

RipplesNigeria …without borders, without fears

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now