Drivers can breathe a sigh of relief as fuel prices marginally fell in September showing a consistent downward trend.
On average, fuel prices dropped by 6.5p in September, saving drivers £3.60 per fill-up with petrol down to 134.79p from 141.26p at the start of the month.
According to the RAC, diesel prices have also dropped from 146p to 139.5p in September with drivers now paying just under £77 to fill a full tank.
The drop in fuel prices marks the fifth consecutive month of reduced fuel as the impact of the cost-of-living crisis slowly eases, while September also saw the ninth biggest monthly price drop since 2000.
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RAC head of policy Simon Williams said: “Drivers will be very pleased to see prices at the pump not only continuing to fall but dropping by 6.5p in just a month as this translates to saving £3.60 on a full tank.
“Since the start of May prices have come down dramatically, with 15.5p being shaved off unleaded and 18.5p off diesel.
“The reductions have primarily been driven by a drop in the price of oil from above $90 (£68) in early April to below $70 (£53) briefly in mid-September, supported by a slightly stronger pound which makes wholesale fuel cheaper as it’s traded in dollars.”
Since the start of May, petrol prices have been continuously dropping with drivers now saving £8.50 on a full tank with this trend expected to continue into the end of the year.
However, while prices are dropping, the RAC hopes pump prices will continue to fall over the next two weeks by as much as 4p a litre in order to have a real impact on drivers.
Williams added: “With analysts predicting oil may continue to fall on the back of a weakened global economy and Saudi Arabia upping its output to regain lost market share, the immediate future on the UK’s forecourts looks considerably brighter for drivers.”
Meanwhile, drivers who buy their fuel at major supermarkets are currently saving 3p a litre compared to elsewhere, with Asda still offering the lowest petrol prices at 131p.
As prices slowly decrease in supermarkets, all eyes will be on the Autumn Budget announcement on October 30 to see whether fuel duty increases.
While fuel duty has been frozen at 5p until March 2025, this measure could be axed as the new Labour Government looks to fill the cover the £22billion black hole left by the previous Conservative administration.
A spokesperson for HM Treasury previously told GB News: “Following the spending audit, the Chancellor has been clear that difficult decisions lie ahead on spending, welfare and tax to fix the foundations of our economy. Decisions on how to do that will be taken at the Budget in the round.”
The RAC explained that prices for petrol and diesel at the pumps is governed by wholesale fuel prices, which is the price retailers pay which are impacted by a number of factors.
This includes the global price of crude oil, which in turn is governed by supply and demand for crude oil, oil refinery production and capacity, the pound to dollar exchange rate, as refined fuel is sold in US dollars per metric tonne and distribution costs.
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Fuel duty has been frozen at 5p per litre since 2022
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The RAC stated: “While some of these stay largely static – such as the fuel duty rate and VAT – others such as the oil price and dollar to sterling exchange rate can be very volatile.
“This explains why prices rise and fall. A combination of high oil prices and a weak pound leads to the highest pump prices.”
