Petrol prices hit two-year low after Putin shock

Tumbling oil prices filter through to pumps after spike caused by Russia’s war in Ukraine

Petrol prices have fallen to their lowest in more than two years as tumbling oil prices filter through to the pumps.
Prices this week fell below £1.40 per litre for the first time since October 2021, the AA said. Prices have now reached the level they were at months before Russia’s invasion of Ukraine sent oil soaring.
A litre of petrol now costs 139.97p on average. The last time petrol was cheaper was on 13 October 2021 when it averaged 139.55p.
Fuel has fallen by more than 50p per litre since the record highs seen in summer 2022. Prices peaked on July 3 that year at 191.53p for a litre of petrol and 199.07 for a litre of diesel.
The fall in fuel prices is a boon for drivers, who have endured record-high prices over the last two years.
The drop means that the cost of filling a typical 55-litre fuel tank with petrol has fallen from £105.34 at its peak in 2022 to £76.98 today, a decrease of more than £28.
For a business using vans with an 80-litre, Transit-size fuel tank, the cost of filling up has fallen from £159.26 to £118.26 – a saving of £41.
Luke Bosdet, the AA’s spokesman, said: “While the dramatic improvement in pump prices gives big savings to families and businesses, and also redirects millions of pounds from fuel sales potentially back to the high street, pump prices remain historically very high.
“Before Covid and the Ukraine war, the worst drivers faced was the 142.48p record set in April 2012.”
Fears over global oil supplies in the wake of Russia’s invasion of Ukraine pushed the price of a barrel of Brent crude to more than $120 in June 2022. This quickly fed through to pump prices.
Crude oil prices have fallen ever since and now stand at around $77 – meaning forecourt prices have also fallen.
However, the AA said it was still concerned that forecourt owners were not passing on the lower wholesale prices to customers.
Mr Bosdet said: “The danger is that current pump-price levels are baked in as the new normal.”
The fall in oil prices comes despite the conflict in the Middle East and a surge in shipping prices triggered by chaos in the Red Sea, which is forcing oil tankers and other vessels to reroute from the Suez Canal around South Africa. 
The Suez Canal route is used by ships carrying a tenth of the world’s crude oil and petroleum products and 8pc of liquefied natural gas (LNG). So far the impact on oil prices has been limited.
This week, however, Andrew Bailey, governor of the Bank of England, warned that the conflict posed the biggest potential threat to financial stability this year.
Speaking to a select committee of MPs Mr Bailey said: “Quite a bit of the shipping traffic that goes through those straits and through the Suez Canal is oil and LNG, so we have to watch it [prices] very carefully.”