Drivers are benefiting from the cheapest petrol prices seen at filling station forecourts since summer 2021, new analysis show.
A litre of petrol at UK forecourts has fallen to an average of 131.91p in recent days, the RAC said.
The last time the fuel was cheaper was in July 2021, when it averaged 131.81p per litre.
The motoring group – which tracks average fuel prices on a daily basis – said the average price of petrol has fallen by more than 5p since the start of December, saving drivers nearly £3 every time they fill up a typical 55-litre family car.
Diesel prices have fallen too by 3p per litre since the start of January to 140.97p.
But prices could make a U-turn in the days and weeks as tension in the Middle East intensifies.
Oil prices have this week shot to a six-month high on rising concerns of a US military attack on Iran.
Drivers are benefiting from the cheapest petrol prices seen at filling station forecourts since summer 2021, new analysis show
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The RAC said the falling price of oil in the early part of the month – which dipped below the 60 US dollars per barrel mark on 7 January for the first time since February 2021 – has been the reason for such affordable filling costs this week.
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’.
A litre of petrol at UK forecourts has fallen to an average of 131.91p in recent days, the RAC said. The last time the fuel was cheaper was in July 2021, when it averaged 131.81p per litre. Diesel prices have fallen too by 3p per litre since the start of January to 140.97p
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Why you might want to fill up sooner rather than later
But motorists might want to fill their cars with with petrol or diesel sooner rather than later as tensions between Washington and Tehran mounting.
This has already seen Brent crude jump 5 per cent to $71.89 a barrel on Thursday.
That was the highest since the start of August and took gains since early January, when oil dipped below $60 a barrel, to 20 per cent.
The latest surge in the oil price came as Iran vowed a ‘crushing response’ to any US attack after Donald Trump warned that time was running out for a nuclear deal.
The rising oil price threatens to push up prices at the petrol pumps for motorists as retailers will look to pass on an increase in wholesale fuel price to customers.
Iran is OPEC’s fourth-largest oil producer with output of 3.2million barrels per day.
Analysts warned military conflict could hit Iranian production and lead to the closure of the Strait of Hormuz – a key supply route with 20million barrels passing through it every day.
‘The immediate concern is the collateral damage done if Iran takes a swing at its neighbours or possibly even more tellingly, it closes the Strait of Hormuz to the 20million barrels per day of oil that navigates it,’ said PVM analyst John Evans.
Susannah Streeter, chief investment strategist at Wealth Club, added: ‘President Trump has warned that the US is ready to act, if Tehran does not reach a nuclear agreement.
‘Given that similar build ups were a precursor to the assault on Venezuela and the previous strikes on Iran, there’s an expectation that action is imminent.
‘So, supply concerns are swirling given that such conflict would disrupt crude shipments from Iran and across the region, particularly if the Strait of Hormuz, a key route is made impassable.’
