Cheap fuel that appeared to be getting ever cheaper has been one of the more welcome features of summer 2015. Diesel fell to being cheaper than it’s been for five years. And it became cheaper than petrol for the first time in 14 years. So are cheap fuel prices really here to stay?
Cheap fuel: Why did diesel prices fall so much?
The cost of fuel – whether it’s petrol or diesel – is linked to a variety of factors. Motor fuel’s raw material, crude oil, is traded in dollars. So the relationship between the pound and dollar is important. Currently sterling is strong meaning a pound will buy more dollars. The wholesale price – the cost of fuel to filling stations – is vital too. This is low at the moment because Saudi Arabia has been increasing diesel production for Europe at the same time as European demand has dwindled. As a result, over the past year, the price of crude oil has virtually halved.