Fuel Prices Set to Drop: RAC Predicts 6p Cut in Petrol Costs
Fuel prices are expected to decrease significantly in the coming days and weeks, with potential drops of 6p per litre for petrol and 3p per litre for diesel, according to RAC Fuel Watch data.
Truck refueling at gas station
This reduction follows oil prices falling from over $80 per barrel in mid-January to under $70 currently - the lowest sustained price since August 2021. If oil prices remain stable around $70 per barrel, petrol could reach approximately 130p per litre, while diesel could drop to around 140p.
Northern Ireland is already seeing lower prices, with petrol averaging 133p per litre and diesel at 139p, which is 6p and 7p below UK averages respectively, due to stronger retail competition.
RAC's head of policy, Simon Williams, expects retailers to begin lowering prices this week as they restock at reduced rates. However, the extent of savings passed on to customers remains uncertain.
Key factors affecting fuel prices:
- Wholesale prices (main driver)
- Crude oil prices
- Pound-to-dollar exchange rate
- Distribution costs
- Taxes (fuel duty and VAT)
- Retailer margins
The Competition and Markets Authority (CMA) continues to monitor fuel retailing competition after finding major retailers overcharged drivers by £1.6bn in 2023, up from £900m in 2022. Their next quarterly report is expected later this month.
While taxes remain relatively stable, fluctuations in oil prices and exchange rates significantly impact pump prices. The final price consumers pay reflects a combination of these global and local factors.