UK motorists are beginning to benefit from falling fuel costs as easing tensions in the Middle East drive oil prices sharply lower.
According to the RAC, petrol prices have dropped by almost 5p per litre from the highs reached during the Iran conflict, reducing the cost of filling an average family car by around £3 per tank.
The average price of unleaded petrol has fallen from 159.53p per litre on 28 May to 154.72p, the lowest level since early April.
Diesel drivers have seen even greater relief. Average diesel prices have dropped by more than 17p per litre from their April peak of 191.54p to 174.3p, marking the lowest level since March.
The decline follows a sharp retreat in global oil markets after progress towards a peace agreement between the United States and Iran reduced concerns about disruption to energy supplies from the Middle East.
Brent crude, the international oil benchmark, has now traded below $80 per barrel for two consecutive days, a level not seen since the beginning of March. Oil prices had previously surged above $120 per barrel during the height of the conflict amid fears over the closure of the Strait of Hormuz, one of the world’s most important energy shipping routes.
RAC Head of Policy Simon Williams believes the recent decline in crude prices should continue feeding through to UK forecourts in the coming weeks.
He said motorists could soon see average petrol prices fall below 150p per litre, while diesel may move back under 170p per litre if current wholesale market conditions persist.
The drop in fuel costs also has broader implications for the UK economy. Lower petrol and diesel prices help reduce household expenses, support consumer spending and ease inflationary pressures that have concerned policymakers in recent months.
The Bank of England recently highlighted uncertainty surrounding energy prices as a key factor in its decision to keep interest rates unchanged. Continued weakness in oil markets could provide additional support for inflation moving closer to the Bank’s target over the second half of the year.
For consumers, the immediate benefit is straightforward: cheaper fuel at the pumps. For investors, lower energy costs may also support sectors sensitive to fuel prices, including airlines, transport operators, logistics companies and consumer-facing businesses.
Should Brent crude remain below $80 per barrel, analysts expect further reductions at UK forecourts, offering motorists additional relief after months of elevated fuel costs driven by geopolitical tensions.
