Great news for UK petrol prices
The price of petrol has dropped to its lowest point since the summer of 2021, new data from the RAC shows.
A litre of unleaded now averages 131.91p around the UK, having fallen more than 3p in January. The last time petrol was under 132p was on 2 July 2021, when it averaged 131.81p.
January’s drop follows a 2p per litre reduction last month, which means the cost of petrol has fallen more than 5p since the beginning of December, when it was 137.17p, saving drivers nearly £3 (£2.90) every time they fill up a 55-litre family car. A full tank of petrol now costs £72.55.
The reduction has been driven by oil dipping below the $60 a barrel mark on 7 January – the first time it has done so since February 2021.
Diesel has also come down by 3p to 140.97p in January but is still several pence a litre above its price at the start of July 2021 – 134.36p. In fact, even though it’s fallen 5.5p since the start of December, it’s yet to go below the lowest price in 2025 of 138.14p a litre on 9 June. Today, a full tank of diesel costs £77.53.
“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. And with even lower prices available depending on where drivers fill up, this is a positive start to the year for household budgets, especially so soon after Christmas,” said RAC Head of Policy Simon Williams.
“The Competition and Markets Authority’s 2025 annual road fuel monitoring report, published in December, said competition in the sector had not strengthened and retailer margins remained at historically high levels, and in some cases had increased.
“It also confirmed, contrary to what the fuel retailers trade association had been arguing, that increased operating costs were not the reason for average margins on petrol and diesel being higher.”
Williams noted that RAC Fuel Watch data also shows a similar picture of retailer margins.
“So, 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,” he said.
