Petrol and diesel drivers are finally seeing relief at the pumps as new data has shown that fuel prices have fallen to the lowest price since the summer of 2021.
Motorists across the UK are now paying an average of 131.91p per litre for petrol, with prices dropping by three pence in the first year of the month.
This is the lowest price for unleaded fuel since July 2, 2021, when average prices sat around 131.81p per litre.
Since the start of December, petrol drivers have seen a 5p drop, allowing them to save almost £3 every time they fill up a standard 55-litre family car.
Falling fuel prices have come as the global price of oil has dipped below $60 (£43.68) a barrel earlier this month.
This is the lowest since February 2021, which was prior to the Russian invasion of Ukraine, which sent oil prices soaring amid the instability in the region.
Diesel vehicle owners are also seeing impressive savings, although they are still paying more than those filling up with petrol.
While diesel prices have fallen in recent months to around 140.97p, they are still far more expensive than in the summer of 2021, when drivers were paying an average of 134.36p per litre.
Petrol and diesel drivers are seeing major price savings at fuel pumps
| GETTY/PADiesel prices are also still higher than they were at the lowest price in 2025 (138.14p), despite a 5.5p fall since the start of December.
Simon Williams, head of policy at the RAC, said: "Seeing the price of petrol dip under 132p is a genuine boost for drivers, rewinding prices to those we last saw four and a half years ago.
"And with even cheaper prices available depending on where drivers fill up, this is a positive start to the year for household budgets, especially so soon after Christmas."
Despite the positive outlook for fuel prices, Mr Williams noted that prices should be lower, especially following intervention from the Competition and Markets Authority.
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Retailers were failing to pass on savings to drivers, despite the falling price of oil and steadily easing tensions in conflict zones around the world.
Margins for fuel sellers also remained at "historically high levels", while in some instances, the margins had increased.
The RAC noted that increased operating costs were not the reason for average margins on petrol and diesel being higher.
The Fuel Finder scheme could help cut prices by between one and six pence per litre | PAMr Williams continued, saying: "Our analysis of RAC Fuel Watch data also shows a similar picture of retailer margins.
"So, had retailers passed on more of the savings they've benefitted from when buying new fuel supply on the wholesale market, the January price reductions would probably have been bigger."
The Government is in the process of introducing the Fuel Finder scheme, which could save drivers between one and six pence per litre when filling up.
It will show motorists the live prices for all filling stations in their area, allowing drivers to pick the cheapest and most convenient option for them to save money.