Petrol prices drop to lowest level in almost five years

A litre of petrol at UK forecourts costs an average of 131.91p, the RAC said

Drivers of petrol cars are currently benefiting from the lowest fuel prices recorded since summer 2021, according to fresh analysis.

The average cost of a litre of petrol at UK forecourts now stands at 131.91p, the RAC has said.

This marks a notable decrease, with prices not having been this low since July 2021, when they averaged 131.81p per litre.

The motoring organisation highlighted that petrol prices have fallen by more than 5p since the beginning of December, offering drivers a saving of nearly £3 when filling a typical 55-litre family car.

Diesel prices have also seen a reduction, dropping by 3p per litre since early January to an average of 140.97p.

Petrol prices have not been this low since July 2021 (Peter Byrne/PA)

The decline is attributed to a fall in the global price of oil, which dipped below the US$60 per barrel mark on 7 January – a level not observed since February 2021.

RAC head of policy Simon Williams said: “Seeing the price of petrol dip under 132p is a genuine boost for drivers, rewinding prices to those we last saw four and a half years ago.

“With even cheaper prices available depending on where drivers fill up, this is a positive start to the year for household budgets.

“Had retailers passed on more of the savings they’ve benefited from when buying new fuel supply on the wholesale market, the January price reductions would probably have been bigger.”

A report by the the UK’s competition watchdog the Competition and Markets Authority published in December found profit margins made by fuel retailers had risen over the previous year.

It said this could not be explained by operating cost pressures, as claimed by supermarkets and other fuel retailers, and signalled that competition in the sector was “weak”.