Fuel prices have dropped up to 18.5p per litre since May, but they could be set to rise

Good news: fuel prices have become more pocket-friendly. According to figures from the RAC Fuel Watch, petrol has fallen 15.5 pence per litre since May, with diesel falling as much as 18.5 pence per litre. However, they could be set to rise, due to the conflict in the Middle East.

RAC fuel spokesperson Simon Williams said: “Serious global events of this nature often cause a spike in oil prices which is never good for drivers in the UK, especially if it is sustained."

Since oil dropped from £69 ($90) a barrel in early July to £55 ($72) at the end of September, motorists have benefitted from cheaper prices. That means petrol is currently an average of £1.34 pence per litre for unleaded and £1.48 pence per litre for the better stuff. Meanwhile, diesel is £1.39 pence per litre.
 
Williams continued: “As pump prices have still been falling due to lower wholesale costs in recent weeks, there’s the potential for this to cushion the negative effective of a rising oil price to some degree. We very much hope the current situation won’t bring an end to the slightly better times at the pumps drivers have been benefitting from.”

UK fuel prices are now in the realm of the affordable, with the cost of a fill-up over five quid less for the average family.

Plenty of drivers still aren't paying anywhere near that, though. Various bodies across the industry are still pointing out an excessive margin of around six pence being slapped onto prices at the pump, even while wholesale costs fall. It means the UK is – according to numbers from RAC Fuel Watch - the most expensive place to buy diesel. Er, great.

To make matters worse, rumours of fuel duty increases in the Autumn Budget (30 October) suggest this dip is merely a short-lived stay from even more financial pain.

The CMA's been keeping an eye on fuel prices since a report last summer found that drivers had been overcharged around £900m in 2022. The RAC has called for an end to the 'rocket and feather' approach to pricing. That's where retailers hike the prices up quickly when wholesale prices climb, but reduce them much more slowly when the wholesale prices fall again – thus keeping them unfairly inflated for longer. Could this new drop spell the end of this practice? Don't hold your breath.

The variation in fuel across the country is staggering. Supermarket petrol prices can be anything between £1.22 and £1.39. The RAC has also calculated that of the two big oil companies, BP and Shell have a remarkable spread in their pricing. There's a full 30p between the lowest and highest BP forecourt price, and 28p between Shell's.

Williams has previously said: "Drivers in Northern Ireland continue to get the best value with pump prices there between 5.5p and 6p cheaper per litre compared to the average across the whole of the UK."

That's because the fuel stations in Northern Ireland are less dominated by the supermarket prices, they better reflect the true cost of fuel. Should we then be paying closer to £1.18 per litre for petrol and £1.29 per litre for diesel? Crikey.

The idea of a pay-per-mile model has also been floated as a possible reform to the current taxation on motorists, in a bid to replace the revenues lost at the pump from the uptake of electric vehicles, but nothing has been confirmed. More as we have it.

In the meantime, let's answer your most burning questions about fuel prices in the UK.

How much is petrol in the UK today?

It depends. We'll keep you posted on the latest fuel prices, but the RAC Fuel Watch alert is also a good resource. The prices of petrol fluctuate based on the price of oil. It's a long (and frankly, boring) story, so we'll keep it short.

Crude Oil + Delivery (not Amazon Prime, sadly, but those trucks don't drive themselves... yet) + Retailer margin + Fuel Duty  = The final fuel price at the pump

It's worth noting that retailer margin is where you'll see the most movement and why one station up the road can differ so greatly from another.

Are fuel prices coming down in the UK?

It seems they are, but how long for is anyone's guess.

What is the cheapest fuel near me?

After consulting our TG crystal ball, aka The Internet, your best bet for locating the cheapest fuel anywhere in the UK is via the extremely convenient PetrolPrices.com app. It's free to download, you'll need to register, but you can enter any postcode or town and it'll show the local stations and the price at each. You can use filters to locate only specific brands if you have a loyalty card. They've also integrated a comment service, so you can award stars and feedback on each of your fill-ups, if you like. 

Why are UK fuel prices so high?

It's a great question, but it depends on the month you ask it. The ongoing global conflicts continue to have an impact, but lower oil production in the Middle East (i.e. a cap on how much they take out of the ground) and more demand coming from China means prices are fluctuating. Other factors, like currency exchange rates, play a role too. 

How much was a litre of petrol in the UK in 2023?

The short answer is 'lower'. The graphs below show how the fuel prices have been tracking over the last few years.