BP’s chief Bob Dudley has said £1-a-litre at UK petrol pumps is possible as prices stay low for the next three years.
Speaking to BBC Business at the World Economic Forum in the Swiss resort of Davos he said BP expected low prices will lead to job losses and falling investment in the North Sea oil industry and elsewhere, curbing supply and, eventually, forcing the price back up.
Dudley said historically world oil prices have fluctuated and, sometimes, have remained low for a number of years.
He expects to see current low prices for at least a year and that BP has to plan for that.
Mr Dudley said lower oil prices could mean UK petrol could fall below £1 per litre. This kind of petrol price was “not far off”, despite taxation forming a part of the fuel price.
“Companies like us, at BP, we’re going to need to rebase the company based on no guarantees at all that the price will come back up,” he said.
“We have go to plan on this [price] being down, and we don’t know exactly what level, but certainly a year, I think probably two and maybe three years.”
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From 2010 until mid-2014, oil prices around the world were fairly stable, at around $110 a barrel.
However, since June prices have more than halved. Brent crude oil is around $48 a barrel, and US crude is around $47 a barrel.