Petrol prices continue to tumble

  • Price of petrol reaches three-year low
  • Diesel cost lowest for two years
  • Supermarkets keep on cutting prices

The average price of petrol has reached a three-year low after falling to 87.7p per litre.

This is the lowest price petrol has been since December 2005 when the average was down to 88.2p per litre. Diesel has also fallen to its lowest price since November 2007 and is now at an average price of 99.7p per litre.

The new low comes as the big four supermarkets continue to cut fuel costs after a summer of record high prices in which petrol rose to 119.7p per litre in July. The price cut also comes with the price of oil dropping to below $40 a barrel; despite oil producer Opec stating it would be cutting production.

Supermarket Tesco has cut its fuel price by a further 3p per litre. Costs on the forecourt now range from 82.9 to 85.9p per litre for petrol and 94.9 to 97.9p per litre for diesel, while Asda, Morrisons and Sainsbury’s have all dropped their prices as the supermarket price war continues.

According to the AA a UK driver is saving on average £16 when filling up a typical 50-litre tank compared to last summer, while families with two cars could be spending £68.39 less a month on petrol.

However, It is not only the big four supermarkets that are cutting their fuel prices with Total UK and Shell  also set to drop their lowest petrol price to 82.9p per litre while small independent garages are also expected to drop their fuel prices.

AA public affairs head Paul Watters said: "Next year could see some intriguing changes to fuel-buying habits as more small independent petrol stations match or undercut supermarket prices to draw customers to more profitable small shop sales.

Retail sales figures during the late summer seem to indicate that drivers will desert supermarket filling stations in significant numbers if there is no price difference to lure them in."