Drivers in Dereham and Fakenham are celebrating as supermarkets slashed the price of diesel.

Fuel falls below £1 a litre at Morrisons, in Fakenham. Picture: Chris Bishop

Fuel falls below £1 a litre at Morrisons, in Fakenham. Picture: Chris Bishop - Credit: Archant

Morrisons in both towns is now selling the fuel for less than the symbolic £1 per litre level but motoring research charity the RAC Foundation asked why bargains had not been seen sooner and more widely.

The RAC said the price cut was good news for drivers, particularly after the expense of the festive season, but it was long overdue.

RAC Fuel Watch spokesman Pete Williams said: 'Diesel drivers will clearly welcome this move by the big supermarkets, although it would be fair to say it has been slow in coming.

'The wholesale price of diesel has been around two pence cheaper than the wholesale price of petrol since a couple of weeks before Christmas so we should have seen these cuts earlier and that is what the RAC has been calling for.

'We hope that other supermarkets and the cheaper fuel retailers will follow suit swiftly and do the right thing for motorists. This should reduce the average price of diesel across the UK for motorists everywhere who can then benefit from the low price of crude oil on the world commodity market.

'Saudi Arabia has also reiterated its intention not to cut oil production so the world will continue to be awash with oil as demand is also down suggesting that sustained lower petrol and diesel prices are going to be around for much of 2016.'

The lion's share of the price we pay at the pump, around 75pc, goes to the Treasury in duty and VAT. The rest of the price is production, refinery costs, distribution and the fuel retailers' margins.

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While this limits how far prices could fall, experts say prices could well continue to fall and a pump price of 90 pence a litre is not that far-fetched.