Wondering why diesel is now cheaper than petrol? Here’s why

You would have noticed over the past two months that the price of diesel has slowly crept lower than that of petrol. Prices of both diesel and petrol have been falling since the price of oil crashed in the back end of 2014. Supermarkets have been very aggressive with their price cuts and this month have slashed diesel prices by 5p per litre, with the average cost of a litre of diesel now sitting at 112 pence.

The last time diesel prices were lower than that of petrol was in 2001 and they have slowly rose since then due to a large uptake of diesel vehicles and the UK’s slow response to add additional refinery’s to handle the demand.

The reason this has now changed is because of the opening of two new diesel refinery’s in Saudi Arabia, adding a lot more diesel onto the market. A very strong pound against the dollar has allowed supermarkets to drop diesel prices considerably, while petrol prices remain the same.

Although drivers of petrol vehicles may feel hard done by, this reduction in diesel price has been a long time coming after the industry was criticised for not passing on savings to consumers.