After three consecutive months of declines, the average price of petrol reached 148.35p at the end of January and has since begun to slowly rise again, according to RAC Fuel Watch data.
Unleaded finished January at 148.89p, down 3p from the start of the month, after falling as much as 3.5p at one point (151.85p). The last time drivers paid this much for gas was in mid-February 2022, just before Russia invaded Ukraine.
The average price of diesel fell by 4 pence, from 174.37 pence to 170.37 pence, a price last seen in March 2022. This means that a tank of diesel now costs £93.70, or £2.20 less than it did in January. A litre of petrol now costs £81.89, a £1.63 decrease from the previous month.
Filling up at one of the big four supermarkets was approximately 3p per litre cheaper for both fuels, with the average price of petrol at their locations ending January at 145.71p (down 2.25p) and diesel at 167.49p (down 2.25p) (down 2.79p). Asda had the most affordable prices, with a litre of unleaded costing 144.61p (down 2.5p) and diesel costing 166.09p (down 3.6p).
“Although January saw fuel prices fall for the third month in a row, there is now more cause for concern than celebration as petrol has already begun to creep back up very slightly,” said RAC fuel spokesman Simon Williams.
“Monthly reductions of 3p for petrol and 4p for diesel were welcome but sadly the first month of the year saw the wholesale price of petrol rise by 2p and diesel by 3p. Despite this, while unleaded has been overpriced for months as a result of the largest retailers’ refusal to lower their prices in line with the lower wholesale price, diesel is still too expensive even after accounting for the slight wholesale uptick.
“As is always the case, drivers’ fate at the pump is heavily influenced by the price of oil. However, with the barrel now consistently trading well above $80 and analysts predicting a rise to $90 due to increased demand from a re-opened China following the end of its zero-Covid policy, there is a very real risk that petrol prices will quickly return to an average of 155p. The Chancellor will also be scrutinised next month when he delivers his Spring Budget, so we hope he does not add fuel to the inflationary fire by raising duty.
“For the time being, however, the big four supermarkets – which dominate UK fuel retailing – are yet to raise their prices in response to the slight rise in wholesale costs which is encouraging for drivers around the country. We urge them to maintain their firm stance and only raise pump prices if the wholesale price really forces their hand.
“The three months of significantly lower wholesale prices starting from mid-October have highlighted some interesting regional and local pricing disparities, often due to smaller retailers passing on savings in the wholesale cost of fuel to their customers while their supermarket rivals have been reluctant to do the same. As a result, drivers have often seen far higher pump prices in areas where there is little competition from lower-cost retailers.
Looking around the UK at the end of January, we can see forecourt prices were generally cheaper in the North West, North East, Wales, and Scotland, while Northern Ireland remains an anomaly, being 4p cheaper than the UK average for a variety of reasons.
