The average price of unleaded petrol has slipped to 151.98p per litre, while diesel has fallen to 168.64p per litre, according to the latest RAC Fuel Watch data. However, the RAC is calling on retailers to slash prices more dramatically, insisting that drivers are still being overcharged despite plummeting wholesale fuel costs.
RAC Calls for Faster Reductions
RAC head of policy Simon Williams said: "Fuel prices are falling steadily in reaction to the drop in the price of oil and wholesale petrol and diesel costs which is good news for drivers who've had a torrid time at the pumps this year. But our analysis of wholesale data shows the reduction should be faster and greater, particularly for diesel."
He continued: "The average price of petrol has come down 2p in the last week to 151.98p and diesel by 4p to 168.64p. Since unleaded hit an Iran war high of 159.53p on 28 May it's fallen by almost 8p whereas diesel is down 23p from its peak of 191.54p on 15 April."
Potential for Further Drops
Mr Williams suggested that if retailers properly reflected lower wholesale prices, drivers could soon see average petrol costs dip below 150p per litre and diesel fall beneath 160p per litre. He said: "Drivers really ought to see average prices of below 150p for unleaded and below 160p for diesel in the next week or so."
Despite recent drops, motorists are still paying £83.59 to fill up a typical 55-litre family car with petrol and £92.75 for diesel. That's £10.50 more for petrol and £14.40 more for diesel compared to pre-Iran conflict levels at the end of February, when oil prices began their surge.
Oil Market Cooling
Calls for lower pump prices have intensified as global oil markets have cooled significantly. Brent crude was hovering around $73 a barrel on Monday morning, well below the peaks seen during Middle East tensions when concerns about supply disruptions through the Strait of Hormuz were at their height. Oil prices have now fallen back to roughly where they stood before the latest geopolitical turmoil.
The declining cost of oil has reignited debate about how swiftly filling stations pass savings onto drivers. Last week, it became clear that the steep drop in crude oil prices wasn't being fully reflected at Britain's pumps, even though wholesale fuel costs had tumbled. The RAC noted that forecourt prices usually trail behind oil market movements, but insisted retailers should now be cutting prices more aggressively.
Regulator Scrutiny
The Competition and Markets Authority is also keeping a close eye on the situation. Earlier this year, the watchdog put fuel retailers on notice over potential profiteering during the oil price spike and continues to scrutinise whether wholesale savings are being passed on fairly to drivers. The regulator has cautioned it is looking for evidence of the so-called "rocket and feather" effect, where prices rise rapidly when oil becomes more expensive but fall much more slowly when costs come back down.
