Call for retailers to follow suit as businessman cuts diesel to under £1 a litre


Christmas has come early for thousands of drivers, with diesel falling to under £1 a litre for the first time since the economic crash.

Three independent filling stations run by businessman Velautham Sarveswaran in the Midlands had the price at the pump slashed by 3p overnight, providing a gift to squeezed consumers.

The RAC Foundation said the move was a "welcome respite" for the hard-pressed public who have been spending for Christmas, and followed a recent dip in the wholesale market price.

One driver filling up at the cut-price pumps today added it was "about time" diesel fell into line with petrol, which had already been cut to under £1 by some retailers earlier this month.

According to the motoring group's data, the last time diesel was under the landmark threshold was when the world was in the grip of economic slowdown in spring 2009.

The AA has joined the RAC in calling for other retailers to follow suit, pointing out the current average pump price for diesel across the UK is still standing at 106.49p.

Dr Sarveswaran, who owns three forecourts in Walsall, Redditch and Birmingham, said: "It's very good for the customers, obviously they're pleased.

Speaking from his filling station in Worcestershire, near the M42 motorway, the former civil engineer said he was responding to customer demand and also called for more fairness at the pumps.

At one of his garages, there is a 65%-35% split in favour of diesel consumers, while at his other two sites the split in fuel sold is about even.

"I wanted to give people an early Christmas present and to thank people for all their custom," he added.

Dr Sarveswaran, who has run the business with wife Ananthi since 2002, said the move would save the average diesel car runner £1.20 on each full tank of fuel bought at his stations.

He said he intends to keep the prices low for the next three weeks or so.

The 53-year-old said diesel customers had been asking why, with petrol dropping to under a £1, they had not been seeing a similar fall.

"Diesel customers have been asking why they are being penalised, and that's a fair question," he said.

Customer Trevor Knight, from Knowle, Warwickshire, was delighted as he pulled up to fuel his Ford Fiesta, saying: "It's about time.

"I was going to put a fiver in, but at that price I'll put a bit more in," said the 52-year-old mechanic.

In the latest wholesale market data published in the last week, the diesel price has dipped under that of petrol for the first time since September 2015, according to industry experts.

Steve Gooding, RAC Foundation director, said: "Motorists looking for a respite from all the financial pressures Christmas brings will be relieved to see forecourt pump prices reduced swiftly in response to a further drop in the wholesale fuel price which, for the second time this year, has seen the price of diesel drop below that for petrol.

"But not every retailer is so quick off the mark.

"The New Year will reveal whether the sub-£1 per litre price is sustainable, or whether it is a Christmas bonus that we should just enjoy while it lasts."

Earlier this month, Morrisons led other retailers in slashing petrol prices to under £1 a litre.

Mr Gooding said wholesale fuel prices had dipped because there was currently more oil supply than demand, exerting downward pressure on prices.

This time last year, prices were £1.05 a litre for petrol and 2p more for diesel, before rising in the early part of 2015.

The price of diesel running into December had been hovering around the £1.02 a litre mark, according to the RAC Foundation.

RAC spokesman Simon Williams said he hoped supermarkets would take their lead from Mr Sarveswaran: "The supermarkets had the scope to cut diesel to below £1 a litre a week ago as the wholesale price has been low enough for this to happen for the last two weeks," he said.

"Maybe this will be the spark they finally need to make the move and treat diesel drivers to a Christmas fill-up at under £1 a litre for the first time since the spring of 2009."

Edmund King, AA president, also called for retailers to pass on wholesale fuel savings, adding rural drivers in particular were suffering.

He said: "Away from the marketing gimmicks and supermarket offers, the average price of diesel is still 106.49p which is at least 2 to 3p more expensive than it should be.

"We would like to see reduced prices across the board."

Meanwhile, new data showed consumer confidence rose in December, capping the best year for British morale since records began more than 40 years ago, helped by the fall in oil prices and low levels of inflation.