Best petrol price falls since 2008

MOTORISTS are enjoying the biggest fall in petrol prices since the credit crunch days of 2008.

But the AA has warned that a further dip in prices is unlikely.

Average petrol prices in the UK fell 5.49p a litre between mid September and mid-October - the biggest monthly fall since the 11.5p petrol price collapse in November 2008, the AA said.

Petrol is now averaging 132.16p a litre while diesel has dipped from 142.50p a litre to 139.12p.

The AA said the price falls have cut £2.74 off the cost of refuelling a small petrol car and £3.84 off the bill for a Ford Mondeo-sized petrol vehicle. A family with two petrol cars will have seen the monthly fuel bill fall by £10.

With the UK consuming typically 1.55 billion litres of petrol a month, the 5.48p average price reduction has diverted around £2.83 million a day from the pump to the high street and other consumer spending.

Comparing average regional pump prices for mid-October, Northern Ireland is most expensive for petrol at 132.9p a litre - despite seeing the biggest fall over the past month. London, the north of England, and Yorkshire and Humberside are jointly the cheapest areas at 131.9p.

Despite a 3.3p-a-litre reduction since mid-September, Scotland remains most expensive for diesel at 140.1p a litre while London is cheapest at 138.6p.

For the past month, the wholesale price of petrol has been largely at the same level it was during December. This has brought the current pump average back to where it started the year, at around 132p a litre. Retailers have responded with prices that are, for the most part, remarkably consistent with where they started the year, the AA said.

But it went on: " The prospect of a further drop in pump prices is doubtful, with the pound losing some of its value against the dollar and a US budget agreement likely to strengthen the American currency.

"The averted industrial action at the Grangemouth refinery reduces the threat of higher oil and wholesale fuel costs in north west Europe. However, the future of UK refineries is back under the spotlight."

AA president Edmund King said: "A more than £2.50-a-tank cut in petrol costs for families is a dramatic improvement on its own. But, heading into winter with cars using more fuel, the timing couldn't be better.

"Alongside Asda, Sainsbury's decision to fully reflect the fall in wholesale prices has been a huge benefit for drivers and businesses. However, the AA is also encouraged by the growing band of non-supermarket retailers challenging the pricing of other supermarkets whose prices in many places are far less generous.

"The bigger picture, with the future of refineries in the British Isles under threat, is more worrying and the AA urges the Government to find ways to support them. Last year's bitter experience of speculator-inflated pump prices, fuelled by refinery closures, should be warning enough - even before considering the loss of UK manufacturing jobs."

By Press Association reporters