Petrol prices fall to lowest level since summer 2021 as oil dips below $60
- Perry Richardson
- 2 hours ago
- 3 min read
Petrol prices across the UK have fallen to their lowest level since the summer of 2021, according to analysis of data from RAC Fuel Watch, delivering further relief for motorists at the start of 2026.
The average price of a litre of unleaded now stands at 131.91p, following a drop of more than 3p during January. The last time the national average fell below 132p was on 2 July 2021, when prices averaged 131.81p per litre.
January’s decline follows a 2p per litre reduction in December, meaning petrol prices have fallen by more than 5p since the beginning of last month, when the average stood at 137.17p. For drivers of a typical 55 litre family car, this equates to a saving of almost £3 per fill-up, with a full tank now costing £72.55.
The fall has been driven largely by movements in the wholesale market, with oil prices dropping below the $60 per barrel mark on 7 January. This was the first time oil traded at that level since February 2021, easing cost pressures on fuel suppliers and retailers.
Unleaded drops below 132p a litre nationwide, easing fuel costs for drivers as scrutiny of retailer pricing continues
Diesel prices have also moved lower, falling by around 3p in January to an average of 140.97p per litre. Despite this reduction, diesel remains several pence higher than its price in early July 2021, when it averaged 134.36p per litre.
Although diesel has fallen by around 5.5p since the start of December, it has yet to dip below its lowest point of 2025, which was 138.14p per litre recorded on 9 June. A full tank of diesel now costs drivers approximately £77.53, continuing to represent a higher operating cost for commercial users and high mileage motorists.
Fuel pricing remains under regulatory scrutiny. The Government tasked the Competition and Markets Authority with monitoring competition in the fuel retail market in 2022. In its first report, the regulator concluded that major retailers had overcharged drivers by £900m during 2022, with total overcharging across all retailers estimated at £1.6bn the following year.
While current price falls reflect improving wholesale conditions, the CMA’s findings continue to shape debate around transparency and competition in fuel retailing, particularly as prices move closer to levels last seen before the sharp inflationary pressures of recent years.
RAC head of policy Simon Williams said: “Seeing the price of petrol dip under 132p is a genuine boost for drivers, rewinding prices to those we last saw four and half years ago. And with even cheaper prices available depending on where drivers fill up, this is a positive start to the year for household budgets, especially so soon after Christmas.
“The Competition and Markets Authority’s 2025 annual road fuel monitoring report published in December said competition in the sector had not strengthened and retailer margins remained at historically high levels, and in some cases had increased. It also confirmed, contrary to what the fuel retailers trade association had been arguing, that increased operating costs were not the reason for average margins on petrol and diesel being higher.
“Our analysis of RAC Fuel Watch data also shows a similar picture of retailer margins. So, had retailers passed on more of the savings they’ve benefitted from when buying new fuel supply on the wholesale market, the January price reductions would probably have been bigger.”
