London, Feb 2, 2026, 08:27 GMT
- According to the RAC, UK petrol prices have dropped to 131.91 pence a litre—the lowest level seen since July 2021
- Diesel prices average 140.97 pence per litre, slipping below the highs seen in early December
- The market watchdog reports that fuel margins are still elevated, even as fluctuations in oil prices heighten uncertainty
UK petrol prices have slipped to their lowest point since July 2021, the RAC reported, with drivers now paying an average of 131.91 pence per litre. That’s down from 137.17p at the start of December, following a drop of over 3p in January. Diesel prices average 140.97p.
The move offers motorists relief early in the year, particularly commuters and small businesses that struggle to reduce mileage. Fuel costs also push up delivery charges and fares, hitting everyday expenses fast.
The Competition and Markets Authority, now overseeing the sector, has flagged that fuel margins — the profits retailers make per litre — stay “persistently high,” despite operating costs not justifying them. It said a “fuel finder” scheme, set to launch in 2026, aims to help drivers compare prices in real time and boost competition. GOV.UK
RAC Fuel Watch data reveals petrol prices in January fell by around 3p a litre from December, dipping below 132p for the first time since July 2021, according to Visordown. Simon Williams, RAC’s head of policy, described the drop as “a genuine boost for drivers” but noted prices could have fallen even more if retailers had passed on additional wholesale savings. The same report highlighted oil slipping under $60 a barrel on Jan. 7, a level unseen since February 2021. Visordown
RAC Fuel Watch monitors daily pump prices at major supermarket chains like Asda, Tesco, Sainsbury’s, and Morrisons, as well as Costco and other outlets, it reported. Price differences between nearby stations remain significant, meaning the cheapest fill-up usually requires some comparison shopping.
Oil prices are slipping sharply. Brent crude dropped $3.38, or 4.9%, to $65.94 a barrel by 0528 GMT Monday. The move followed U.S. President Donald Trump’s comment that Iran was “seriously talking” with Washington, which eased fears of a clash, Reuters reported. IG analyst Tony Sycamore said the market saw this as a retreat from confrontation, cutting the “risk premium” baked into prices. Reuters
OPEC+, the coalition of OPEC members plus allies like Russia, has decided to hold production steady through March, according to another Reuters report. Jorge Leon, once an OPEC official and now with Rystad Energy, highlighted the absence of any signals beyond March as notable, pointing out the group is leaving “all options firmly on the table.” Reuters
Cheaper crude doesn’t guarantee cheaper petrol in a simple way. If oil prices bounce back due to geopolitics, supply hiccups, or changes in producer policies, pump prices can rise again. Plus, high retail margins often mean drivers won’t see the full benefit of any wholesale price dip.
Petrol hovering around 132p a litre offers a brief reprieve for UK drivers. But how long that lasts hinges on developments in the oil market and whether retailers decide to squeeze their margins at the pump further.
