UK petrol and diesel drivers have been given a major boost at the pumps in July after a record fall in fuel prices during June. According to new data from RAC Fuel Watch, the average price of diesel dropped by almost 17p per litre, marking the biggest monthly decline since 2000.
Record-Breaking Decline in Diesel Prices
RAC data shows that diesel averaged 183.75p per litre at the start of June, but by the end of the month costs had tumbled 16.6p to 167.14p. This massive decline exceeded the previous largest drop in May 2023 by almost 5p (4.69p).
Impact of US-Iran Deal on Oil Prices
Simon Williams, RAC head of policy, attributed the price drop to a deal between the US and Iran to end the conflict in the Middle East. He said: “June has been a far better month for drivers on the back of the announcement of a deal between the US and Iran to end the conflict. The price of oil has fallen dramatically and prices at the pumps have reflected that.”
Prices Still Higher Than Pre-Conflict Levels
Despite the record fall, Williams stressed that costs remain higher than earlier in the year. He explained: “While diesel dropping 17p in a month is very positive, it’s also important to realise that its average price shot up 49p a litre from the end of February to 191.54p on 15 April, which equates to a rise of more than a penny a day. So, the cost of the fuel today remains far higher than it was at the start of the war.”
Supermarket Prices Fall Even Further
The diesel pump price fall was even greater at the big four supermarkets, with average prices coming down 19p a litre from 182.37p to 163.28p. The RAC has predicted that petrol prices should dip under 150p soon, with diesel also likely to fall below 160p.
Outlook for Future Prices
However, Williams warned that the price of oil would need to fall further to see a return to pre-conflict prices seen before February. He added: “Fortunately, the oil price is now in the low-$70s range which is only $10 above the average of the first two months of the year. At the time the conflict began drivers had average prices of 132p for unleaded and 142p for diesel, so we’re still some way off those levels.”
