Petrol and diesel prices in the UK have fallen to their lowest levels in over four years, offering a temporary reprieve for drivers. The drop, attributed to a recent downturn in global crude oil prices, may not last as geopolitical tensions threaten to reverse the trend.
Current Pricing and Savings
As of January 2026, the average price of petrol sits at 131.91 pence per litre—the lowest since July 2021—while diesel averages 140.97 pence per litre, down three pence from the start of the month. Filling a typical 55-litre family car now costs £72.55 for petrol and £77.53 for diesel.
For comparison, charging an electric vehicle with a 60kWh battery at home costs approximately £16.61, though public rapid charging can average £46.20. This highlights the continued cost advantage of electric vehicles, despite recent fuel price drops.
Crude Oil and Market Factors
The decline in petrol prices largely stems from a decrease in crude oil costs, which fell from nearly $74 per barrel six months ago to around $60 in January 2026. However, escalating tensions between the U.S. and Iran have already pushed oil prices back above $67 by late January, raising concerns about further increases.
The RAC points out that retailers could have passed on even greater savings to consumers, as margins have historically been high. A December 2025 report by the UK’s Competition and Markets Authority found that retailers’ claims of increased operating costs do not fully justify these margins.
Government Initiatives and Future Outlook
The government’s Pumpwatch scheme, including the FuelFinder app, aims to increase price transparency by providing live data from all fuel retailers. Though its release date remains uncertain, the app could encourage competition and potentially lower prices further.
Despite the current relief, experts warn that geopolitical instability and retailer practices could quickly undo these gains. The situation remains volatile, meaning drivers should not expect sustained low prices without broader systemic changes in energy markets and retail behavior.
The current drop in fuel costs is a welcome break for consumers, but its longevity is uncertain given ongoing global uncertainties.
