Fuel prices edge down slightly in December but savings remain limited for taxi drivers and other motorists
- Perry Richardson
- Jan 8
- 3 min read
Fuel prices dipped slightly in December, offering limited relief to taxi and private hire drivers after sharp rises in November, according to new data from RAC Fuel Watch.
Unleaded petrol fell by 1.8p a litre in December to an average of 135.37p, while diesel dropped by 2.3p to 144.27p. The reductions reversed part of the increases seen a month earlier, when petrol rose by 2.2p and diesel by almost 3.8p, adding pressure to already tight driver margins going into the winter period.
Despite the volatility across the year, both fuels ended 2025 around 1.5p a litre cheaper than they began. Petrol stood at 136.85p on 1 January 2025 and diesel at 142.91p, meaning year-end prices were marginally lower despite several sharp swings through the spring and autumn.
Across the full year, petrol averaged 135.69p a litre and diesel 142.96p. That represents a notable improvement on 2024, when average prices were 142.23p for petrol and 148.67p for diesel. For high-mileage taxi and PHV drivers, the year-on-year reduction equates to several hundred pounds in annual fuel savings, depending on vehicle type and shift patterns.
RAC Fuel Watch data shows modest month-on-month falls at the pumps, though wholesale price drops are yet to fully feed through
Both fuels hit their lowest point of the year on 9 June, with petrol falling to 132.03p and diesel to 138.14p. Prices then climbed steadily into the autumn before easing again in December, reflecting broader instability in global energy markets rather than a sustained downward trend.
Drivers using supermarket forecourts continued to see the best value. In December, supermarket unleaded averaged 132.65p a litre and diesel 141.24p, around 3p cheaper than the UK average. For a typical 55-litre fill, that translated into a saving of roughly £1.50 per tank. A full tank of petrol at a supermarket cost £72.96 compared with £74.45 nationally, while diesel came in at £77.68 versus £79.35.
However, the RAC said pump prices still have not fallen in line with wholesale costs. Oil recorded its lowest monthly average price since January 2021 at $61.69 a barrel during December, briefly dropping below $60, a level not seen since February 2021. The slower pass-through to forecourt prices continues to frustrate professional drivers, for whom fuel remains one of the largest operating costs.
Regional disparities also persist. Northern Ireland remains significantly cheaper than the rest of the UK, with petrol averaging 127.5p a litre and diesel 134.9p. That leaves drivers there paying almost 8p less for petrol and nearly 9.5p less for diesel than their counterparts in Great Britain, highlighting ongoing concerns about pricing fairness and competition across the UK fuel market.
Simon Williams, RAC Head of Policy, said: “After prices at the pumps fell by 2p a litre in December drivers are starting the new year paying 1.5p less than they were a year ago.
“But with oil tumbling below $60 a barrel in mid-December and recording its lowest monthly price in six years, it's a shame drivers aren’t seeing even lower prices on forecourts up and down the UK. As wholesale fuel costs went below those that led to the cheapest prices of the year in June, we’d have hoped to see the year lows of 132p for petrol and 138p for diesel beaten.
“We hope that 2026 will see more competitive pump prices on the back of the Government’s fuel finder scheme going live at the start of February and increasing competition.”
