Coronavirus: UK Petrol prices plunge to £1 amid global pandemic

Fuel prices have fallen to almost £1 a litre for the first time since 2016, with some stations charging even less.

In early April, the cheapest  petrol on the market was being sold at just 102.7p a litre, via a major supermarket.

The AA said that in some petrol stations in Northern Ireland and Birmingham, petrol prices have been spotted for even less than £1.

The petrol price slump started in early March, when the coronavirus outbreak started to hit countries such as the Middle East, large parts of Europe and America.

Oil prices fell following failed talks between Saudi Arabia and Russia over plans to cut production during the pandemic.

As a result, Saudi Arabia ramped up its output and oil prices quickly tumbled to nearly half of their old price.

At the same time, travel restrictions, particularly among airlines, saw the demand for petrol and diesel drop.

In March, the price of oil fell below $25 a barrel - the lowest level since 2002.

But drivers could still struggle to see the benefit because retailers get to choose the going rate.

Petrol prices are tumbling (Getty)

Retailers such as supermarkets tend not to reduce prices quickly when oil prices fall, but raise them rapidly when it rises.

But when one does take action, all of the big four tend to follow suit.

UK petrol prices fell by their largest margin in 12 years in March, according to the RAC.

More than 9p came off the average price of unleaded while the price of diesel was down by nearly 8p.

How much you will now pay for your fuel will depend on where you buy your petrol and when.

Supermarkets tend to be cheaper, while motorways stations are often the most expensive (Getty)

Supermarkets tend to offer the lowest prices, mainly because they use petrol as a loss leader.

That means they sell it cheap in the hope that once you've filled up, you'll pop into the accompanying store and spend lots more cash.

So while the average cost of petrol at the end of March was 113.54p, according to the RAC, supermarket prices were as low as 104p a litre.

But local garages set their prices according to nearby competition - and where there is no competition, prices could rocket.

"Despite the recent enormous supermarket price cuts, based on the wholesale cost of unleaded and diesel, there is still scope for further reductions at forecourts," RAC fuel spokesman Simon Williams, said.

"Indeed, if the supermarkets were to more fully reflect the huge reductions in wholesale prices, we would certainly sell see unleaded sold for under £1 per litre, something they last did in March 2016."

There are also concerns that some smaller forecourts could be forced to close during the coronavirus crisis.

The Petrol Retailers Association (PRA) has warned that many petrol stations will have to close in the coming weeks, as sales of fuel dry up and their businesses become unviable.

A Department for Business, Energy & Industrial Strategy survey published in early April showed that petrol consumption was down by 75% and diesel by 71%.

"To help freight move and help key workers travel safely and independently through this period of crisis, petrol filling stations must remain open, but it is proving to be a challenge for many filling stations," said Brian Madderson, chairman of the PRA.

"Without immediate cash flow assistance, many more forecourts across the UK will have to close," he warned.

Save on fuel all year round

1. Fill up at busy petrol stations - These stations buy more fuel and can take advantage of falling prices. "The big petrol stations have deliveries every day so they can change the price," Arthur Renshaw, of petrol station analyst Catalist Experian, told The Mirror. "But a small petrol station in a village may have a delivery every couple of weeks."

2. Choose a big station - Stations buy their fuel on the wholesale market. Just as in any other negotiation, the big buyers are better able to strike a deal.

3. Look for a cluster of stations - When several stations are close together, they are more likely to cut prices to tempt drivers in. "If you are in the Highlands and Islands of Scotland, you have much less competition than in the centre of Manchester," said Renshaw.

4. What's everyone else charging? The website PetrolPrices.com allows you to compare prices in your area. It also lists the latest average prices, so you know if you’re being ripped off. Use it to compare prices in your area before you top up.

5. Play the supermarket game - Supermarkets are competing on fuel prices along with everything else. When you’re shopping, keep an eye out for vouchers offering petrol discounts. But be aware of the overall cost. "That is one way to get prices down below £1, but you do need to buy a lot of food to get that result," PetrolPrices.com owner Peter Zaborszky said.

6. Stop by provincial towns - Airports, motorways, expensive cities and rural areas have the highest charges, according to PetrolPrices.com analysis. "The golden path is down the middle where rent is cheap," Zaborszky explained.