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UK Petrol Drops to Lowest Since 2021 as Oil Slide Eases Pump Costs

Watchdogs say retailers have kept margins high, muting the pass-through from cheaper oil to forecourt prices.

Overview

  • RAC Fuel Watch reports average unleaded at 131.91p per litre in January, the lowest since July 2021 after a fall of just over 3p in the month and more than 5p since early December.
  • Diesel averaged 140.97p per litre after a 3p monthly drop, still several pence above its July 2021 level, with a typical 55‑litre fill costing about £77.53.
  • A full 55‑litre tank of petrol now costs roughly £72.55, following crude oil dipping below $60 a barrel on January 7.
  • The CMA’s 2025 monitoring report found competition had not strengthened and retailer margins remained historically high, estimating £900 million in driver overcharges in 2022 and £1.6 billion in 2023.
  • RAC and FairFuelUK argue retailers have not fully passed through wholesale savings, while the Treasury has scheduled fuel‑duty rises from September 2026 to March 2027 and a Fuel Finder scheme seeks to improve price transparency.