Drivers should see fuel prices fall from a six-month high in the next few weeks due to a significant drop in wholesale costs, analysis of RAC Fuel Watch data reveals.*
As long as retailers pass on the savings they are benefitting from when buying in new stock, prices at the pump should come down by at least 6p a litre for petrol and 3p a litre for diesel from their current averages of 139p (138.98p) and 146p (145.79p).
The cuts have been made possible by the price of oil dropping from above $80 in mid-January to just under $70 now. In the last week a barrel has averaged $69 – the first time it has sustained such a low price since August 2021.
If oil remains around the $70 mark the RAC believes there’s scope for the price of petrol to fall further, towards 130p a litre and diesel to around 140p. In Northern Ireland, where there is strong competition among retailers, petrol is already being sold for an average of 133p and diesel for 139p – 6p and 7p cheaper than the UK averages.
RAC head of policy Simon Williams said: “Drivers have had to endure five months of rising prices, so it’s good news wholesale prices have fallen significantly, and forecourt totem signs should soon be reflecting this.
“We expect retailers to start to cut prices this week as more buy in new supply at lower prices. As long as the cost of a barrel of crude oil stays around the $70-mark we believe there’s a chance drivers could see petrol heading back down towards 130p a litre.
“As always in a falling market, much will depend on how fully retailers decide to pass on these wholesale savings at the pumps. The old ‘rocket and feather’ saying about prices going up like a rocket and falling like a feather will hopefully be proved wrong this time around.
Back in 2022 the Government tasked the Competition and Markets Authority (CMA) with monitoring competition in fuel retailing. In its first report, the CMA concluded major retailers had overcharged drivers by £900m and in 2023 all retailers were deemed to have overcharged by £1.6bn. In its most recent update last November the CMA expressed concerns about the intensity of competition between fuel retailers. Its next quarterly report is due to be published later this month.
Drivers looking to save money on their fill-ups should take advantage of the fuel finder feature in the free myRAC app. The app can be downloaded for free from the App Store or Google Play. Up to 10 searches a day can be made over a two, five or 10-mile radius, with each giving the five cheapest prices.
The RAC Fuel Watch web page has more information about the average price of petrol and diesel at the big four supermarkets and at motorway services. It also features graphs showing average prices since 2000 as well as a daily financial breakdown of the cost of a litre of petrol and diesel.
