Oil prices in supermarkets could drop 7p-8p to £ 1.10 per liter if the dramatic drop in crude oil prices continues for several weeks, the AA predicted.
The 23% drop Monday to less than $ 35 a barrel could save a family with two cars from around £ 15.50 a month, the car group said.
Last month, there was one of the biggest drops in fuel prices in the past 20 years. Wholesale oil was trading at nearly $ 60 a barrel as of February 21.
The drop in demand due to the coronavirus and the dispute between Russia and Saudi Arabia led to the latest price collapse. Saudi Arabia cut the price of oil over the weekend after failing to convince Russia on Friday to support sharp cuts in production.
The two countries had previously worked together on production brakes, which kept prices higher.
Oil prices opened 30% less on Monday morning, although by noon they were back up to 23% lower.
“The dispute between the oil producers echoes the drop in oil prices in 2015, when one liter per liter fuel was returned to UK petrol stations,” said Luke Bosdet, AA spokesperson for the fuel prices.
“There is still a long way to go and the chances of a further major price slump in the forecourt will depend on how long oil prices fall and how quickly British retailers take advantage of their savings”
RAC Fuel Spokesperson Simon Williams said, “It looks like the biggest daily drop in oil prices in 20 years. This should translate into serious pump cuts, especially since the price of gasoline and diesel is still too expensive despite two rounds of cuts in supermarkets last month. “
Williams urged new chancellor Rishi Sunak to resist calls for more fuel in Wednesday’s budget. Currently, around 58p of duties are added to the wholesale costs of supplying each liter of fuel, with VAT added to this total.
“We very much hope that he does not see this as an opportunity to increase fuel tariffs, given the current volatility in the oil market,” said Williams.