Petrol drops by 6p a litre across the UK in December but is still 5p more expensive than in Northern Ireland

The drop means a full 55-litre tank now costs £77.32, down £3.40 in the month. Diesel also came down by 5p to 149.18p, saving almost £3 (£2.86) on a fill-up (£82.05).

Unleaded is now back to a price last seen in early February 2022 – prior to Russia’s invasion of Ukraine which led to the cost of oil rocketing to around $130. The price of a barrel is now under $80.

Despite the reductions the RAC believes prices on the nation’s forecourts should be lower still if the big four supermarkets were taking fairer, smaller margins. Instead, in December the average supermarket margin on a litre of fuel was 13p which is more than double the amount taken in 2021.

Shockingly, in Northern Ireland petrol is 5p cheaper than the UK average at just 135.28p and diesel is 5p less at 144.2p. Both fuels bought in Northern Ireland are also cheaper than the averages charged at the big four supermarkets – 137.63p for petrol and 145.89p for diesel.

Worse still, the fuel finder feature in the free myRAC app shows independently run forecourt Grindley Brook in Whitchurch, Shropshire, is significantly undercutting the supermarkets by charging 130.9p for petrol – 7p less than their average of 137.63p. Its diesel price is 139.9p – 6p less than the supermarket average of 145.89p.

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RAC fuel spokesman Simon Williams said: “It’s clearly good news that both petrol and diesel came down substantially in December. While we’re starting the year paying much less at the pumps than we have done, it’s still galling to know that drivers aren’t being charged a fair price in comparison to Northern Ireland where the very same petrol and diesel is at least 5p a litre cheaper.

“It’s surely impossible to argue that competition is working properly if prices are so vastly different in two parts of the UK. And if an independent retailer in the middle of Shropshire can be undercutting the supermarkets by around 6p a litre, something has to be very badly wrong.

“We continue to call on the biggest retailers to play fair with drivers and lower their prices to match what’s being charged in Northern Ireland.

“We also urge Energy Security Secretary Claire Coutinho, who is on a mission to bring greater transparency to fuel pricing following the Competition and Markets Authority’s investigation concluding drivers were overcharged to the tune of £900m in 2022, to ask the supermarkets why they won’t charge similar prices to the averages seen across Northern Ireland.”

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RAC Fuel Watch data also shows that the delivered wholesale price of petrol is 104p. This means even with a margin of 10p a litre – 3p higher than the long-term margin of 7p –unleaded should be on sale for an average of 137p, instead of 140.6p as it is currently.

The RAC estimates that the supermarkets could easily be charging around 132p, not their current 137.63p.

Simon Williams added: “In spite of the current overcharging, we strongly hope that 2024 will be the year when drivers finally get to see fairer pump prices.”

Motorists looking to save as much as they can on the forecourt should download the free myRAC app from the App Store or Google Play and start using its fuel finder feature as it can save up to 6p a litre**.

Up to five searches a day over a two, five or 10-mile radius can be made, with each giving the five cheapest prices.

The RAC Fuel Watch web page has more information about the average price of petrol and diesel at the big four supermarkets and at motorway services. It also features graphs showing average prices since 2000 as well as a daily financial breakdown of the cost of a litre of petrol and diesel.