Motorists across the UK are experiencing some relief at the pumps as petrol prices have fallen to their lowest level in three years.
The RAC reports that the average cost of a litre of unleaded petrol has dropped to 135.7p, a significant decrease from recent highs.
Factors Behind the Price Drop
Two main factors are driving this decline in fuel costs:
- Reduced global oil prices: A decrease in worldwide demand has pushed oil prices down to around $73 per barrel.
- Stronger pound: The pound’s improved performance against the US dollar, the currency used for oil transactions, has contributed to lower costs.
Impact on Consumers
This price reduction is welcome news for many households. Families are now spending approximately £4 less to fill up a standard car compared to a month ago.
In some areas, drivers may find unleaded petrol priced as low as £1.26 per litre, potentially bringing the cost of refuelling an average family vehicle to under £70.
Simon Williams, RAC fuel spokesperson Simon Williams said: “To see pump prices drop to this level is really positive news, both for households who depend on their vehicles for getting about, and for the wider economy – as there’s a clear link between the cost of fuel and the headline rate of inflation.
“We believe there is scope for pump prices to come down further in the next few weeks to reflect the lower wholesale costs retailers are paying when they buy fresh fuel stocks.
“We continue to look forward to the new Government proceeding with its plans to introduce greater pump price transparency with the Pumpwatch scheme, along with an official monitoring function that can help ensure drivers are charged a fair price every time they fill up.”
Comparison to Recent Highs
The current prices stand in stark contrast to the record highs seen in the summer of 2022, when petrol reached 191.5p per litre following Russia’s invasion of Ukraine.
Even compared to April of this year, when average petrol prices were 150.1p per litre, the decrease is substantial.
Future Outlook
Experts suggest that prices may continue to fall. The RAC forecasts that petrol could potentially drop to 132p per litre within the next two weeks, which would represent a further three-year low.
However, motorists should be aware that future changes to fuel duty could impact prices. There are discussions about potentially reversing the 5p per litre reduction implemented in March 2022, which could affect pump prices in the coming months.
As the situation evolves, drivers are advised to shop around for the best fuel prices in their local area, as costs can vary significantly between retailers.