Motorists see lowest prices at petrol pumps in nearly five years, new report shows

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

The last time the fuel was cheaper was in July 2021, when it averaged 131.81p per litre.

The RAC 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.

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Diesel prices have fallen by 3p per litre since the start of January to 140.97p.

The RAC attributed it to a fall in the price of oil, which dipped below the 60 US dollars per barrel mark on January 7 for the first time 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".