The average price of petrol fell for the fourth consecutive month with a further 1.6ppl being shaved off in October, according to the latest RAC Fuel Watch data.
Unleaded finished the month at 107.82ppl, down from 109.45ppl at the start, but diesel, however, only reduced fractionally in October from 110.26pl to 109.95ppl.
The continued run of lower fuel prices is being driven by the oil price which remains below $50 a barrel despite a 2% increase throughout the month. The RAC Fuel Watch report for October showed a barrel of crude maintained an average price of $48 a barrel, although there was greater fluctuation in October than in previous months with a five-day spell early on where a barrel went over $50 and a dip towards the end of the month when a barrel hit $45.95 (27 October) – this was almost as low as mid-January ($45.26) when petrol was the lowest it had been for six years (106.09ppl).
The pound gained 2% on the dollar ($1.51 to $1.54) helping to keep the wholesale price of petrol and diesel lower as both fuels are traded in dollars. The RAC is expecting little change in pump prices over the next fortnight.
RAC fuel spokesman Simon Williams said: “We are currently enjoying a sustained period of lower fuel prices as a result of the long-term deflated oil price which has been brought about by OPEC – the Organisation of the Petroleum Exporting Countries – looking to stop competitors taking its share of the market by overproducing and keeping the barrel price low.
“A year ago motorists had probably become accustomed to only ever seeing prices go up so having four consecutive months of the petrol price coming down is a pleasant surprise. Fuel is without doubt the biggest cost of motoring and the forecourt price is a constant cause of concern for drivers which makes this relief at the pumps all the more welcome.
“The question is how low will prices go, albeit with the caveat that two-thirds of every till receipt is made up of tax through fuel duty at 57.95p a litre and VAT on top. And, as prices head towards the £1 per litre mark, the tax take rises to 75%.”
HMRC oil duty statistics for September show combined sales of petrol and diesel were 3.5% down on August at 3.834bn litres but 1.9% up compared to August 2014. Petrol sales (1.460bn) were 1.1% down on August and diesel (2.374bn) was 5% down on the month before, but 2.95% up on the previous August.