Petrol and diesel prices are falling at a faster rate than at any other point in 2024. What motorists are paying at the pump has fallen significantly this month on the back of shifting oil prices and currency fluctuations, offering some welcome relief after the record highs of recent years.
Analysis from the RAC has calculated the average price of a litre of unleaded petrol in the UK to currently be around 136.15p, a 6.71p drop from last month’s average of 142.86p. The change was similar for the average cost of a litre of diesel, down to 141p from 148p a month ago. This equates to the biggest drop since December 2023. It is welcome news for motorists who as recently as April 2024 had been paying an average 150.1p per litre for petrol and 158.3p for diesel.
What’s more, the RAC expects further reductions in the next couple of weeks to take fuel prices to their lowest point for three years. Its latest analysis predicts the average cost for a litre of petrol to drop to 132p and 138p a litre for diesel.
Why are fuel prices going down?
As with most changes to petrol and diesel prices, the reduction is down to a lower global demand for oil. The price of a barrel of oil fell to $73 last week, down from $91 in April. This $18 drop is accentuated by the pound strengthening against the dollar.
Simon Williams, the RAC’s lead spokesperson on fuel, said: “It’s really encouraging to see pump prices coming down so rapidly, which we know is as good for drivers’ wallets as it is for keeping the headline level of inflation in check.
“Of course, global oil prices and even the strength of the pound can fluctuate wildly, and that’s something completely out of drivers’ control. But with the cost of filling up making up a sizeable chunk of many households’ overall monthly spending, it makes sense to stretch every pound spent on fuel as far as possible.”
Will fuel prices continue to fall?
While the RAC expects what you pay at the pump to drop in the next couple of weeks, the medium-term outlook is a bit more uncertain. In March 2022, the then government chose to cut fuel duty in the wake of soaring energy costs, however this may not remain under the new government.
Reversing the cut would return fuel duty to 58p per litre from 53p per litre, which theoretically could see prices rise. However, some observers – including the RAC – have pointed out that much of this discount was put towards retailer profits rather than being passed on to customers. This would suggest that retailers may struggle to justify a price increase in the case of the full duty being restored.
If you are concerned about the potential for fuel costs to rise again, or you are still struggling to pay the new, lower prices, take a look at our ‘How to save money on your household bills’ page. This includes some great tips on how to keep your outgoings down and manage your money more effectively. Also, you can make sure you are getting the best fuel prices in your area by checking out this handy online tool.
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