Petrol to fall below £1 per litre for Christmas as oil price drops below $40 a barrel

A tank of petrol for the average family car £9 cheaper than last year, while a tank of diesel is £11 cheaper

Brent crude oil, which accounts for two thirds of global contracts, fell below $40 a barrel for the first time since 2009 on December 8 (Rex Features)

Petrol is to fall below £1 a litre or less before Christmas as long as retailers pass on savings from the falling price of oil, according to RAC.

Brent crude oil, which accounts for two thirds of global contracts, fell below $40 a barrel for the first time since 2009 on December 8. It started sliding days earlier when the Organisation of Petroleum Exporting Countries failed to reach an agreement to limit supply and shore up prices.

The end of day price for a barrel of Brent crude fell from $41.80 last Friday to $39.77 on Monday.

The RAC said this change should see 3p a litre come off the price of petrol and 5p a litre off the price of diesel, taking average prices to aroun 103p for petrol and 104p for diesel. The price of diesel is already at a six-year low, with the average price reaching 109.18p on Friday.

That makes a tank of petrol for the average family car £9 cheaper than last year, while a tank of diesel is £11 cheaper.

Simon Williams, RAC fuel watch spokesman, said that petrol below £1 a litre would become a common sight across forecourts in the UK. "All we need is for the supermarkets to do the right thing and embrace the season of goodwill by passing on those savings at the pump to make Christmas that bit cheaper for everyone," Williams said.

"If retailers don’t pass on the savings quickly, they will be giving themselves an unpopular Christmas boost to profits by pocketing the extra margin when they should really be passing this on to their customers instead."