Petrol prices: Driving home for Christmas set to be cheapest since pandemic

A warning was issued that drivers were still paying more for fuel than they should due to ‘stubbornly high’ margins

A reinvigorated new car market was delivering more choice and affordability for used car buyers, the Society of Motor Manufacturers and Traders said (Alamy/PA)

Drivers are set to enjoy an early Christmas present this year with the cheapest festive fuel prices since the pandemic.

Petrol went up by a penny to 136.5p in November – but is still 10.5p cheaper than a year ago, according to latest data from RAC Fuel Watch.

Diesel went up by 1.8p to 142.25p, but remained 12p cheaper than the same time last year.

The prices take the cost of full tanks for 55-litre family cars to £75 for petrol and £78 for diesel – or £5.75 and £6.60 less than a year ago respectively.

Compared to two years ago, nine months after the price of oil rocketed due to Russia invading Ukraine, petrol is now 23.4p or £12.90 a tank less, while diesel is 41.7p or £22.90 a tank cheaper.

At the end of November, a litre of petrol bought at one of the big four supermarkets cost 133.2p, 3.3p cheaper than the UK average, while diesel was 138.6p, 3.6p less than the average price paid on UK forecourts, the RAC reported.

Prices at the end of the month were cheapest in Northern Ireland with petrol averaging 130.6p and diesel 135.2p – 6p and 7p less than the UK average.

A PA graphic showing the average pump price of unleaded petrol (per litre), starting at 135p in September 2021, climbing to more than 160p by September 2022, falling to just over 150p by September 2023, and falling again to 135.7p by September 24 2024 (PA Graphics)

England was the most expensive with petrol at an average of 136p and diesel at 141.7p, while Scotland and Wales were 134.5p and 134.9p for petrol and 140.6p and 140.2p for diesel.

The cost of oil had remained broadly stable, averaging 73 US dollars a barrel, leading to little change in wholesale prices.

However, the RAC’s figures follow the competition watchdog warning last week that drivers were still paying more for fuel than they should due to “stubbornly high” margins.

The Competition and Markets Authority (CMA) said fuel margins remained higher than historic levels, and it remained concerned about weakened competition in the sector.

Supermarket fuel margins increased from 7% in April to 8.1% in August, while non-supermarket fuel margins rose from 7.8% in April to 10.2% in August, the watchdog said.

The average petrol and diesel prices at the end of October were 134.4 and 139.7 pence per litre (PA) (PA Media)

RAC head of policy Simon Williams said: “Heading up to the most expensive time of year for families, it’s good to see that this Christmas is set to be the cheapest for fuel since the pandemic.

“Despite both petrol and diesel rising by a penny and two pence respectively in November, the difference to a year ago is considerable with petrol 10.5p lower and diesel 12p less. This is great news for people making long festive journeys to visit friends and families as it should save them around £6 on a tank of fuel compared to last year.

“While conditions are clearly better for drivers this Christmas than previous ones, we’re still conscious that prices at the pumps could be slightly cheaper if retailer margins were lower.

“So, it was disappointing to see last week that the Competition and Markets Authority has once again expressed concern about a lack of competition among fuel retailers. This comes on the back of the CMA concluding drivers were overcharged by £1.6bn in 2023.

“We hope the Government’s commitment at the Budget to introducing a mandatory fuel price finding scheme next year will spark competition and lead to a fairer fuel retailing landscape that delivers better value for drivers wherever they fill up.”