Petrol and Diesel Fall to a New Three Year Low

24th August 2014

This week's supermarket price war has brought drivers in the UK a bank holiday boost with the average prices of petrol and diesel falling to new three-year lows.

However, UK price falls have so far been lagging behind most of its European neighbours', the August AA Fuel Price Report reveals.

Yesterday, petrol averaged 129.12p a litre at the pump while the cost of diesel averaged 133.55p.

Petrol

The previous three-year low was 129.18p on 10 February this year. However, the last time petrol was lower than yesterday's 129.12p was on 23 February 2011, when the average pump price was 129.05p a litre.

Diesel

The typical cost of diesel yesterday was the lowest since 6 February 2011, when the average was 133.37p a litre.

European comparisons

Despite Monday's announcement of petrol dropping to 124.7p a litre in 'Asda' towns, falling UK petrol prices have been playing catch-up with price reductions in Europe.

The table, from EU-published weekly prices, shows how much more quickly other European countries have cut their petrol pump prices. This is despite a near identical wholesale price reduction, in either euros or pounds, of around 5.5% between the first week of July and the first week of August, leading to the price falls in the second week of August.

Supermarket price war

"Asda triggered something of a supermarket price war on Tuesday, which was enough to send average UK pump prices to their lowest for more than three years. A year ago, petrol (137.33p) and diesel (141.62p) were more than 8p a litre more expensive. For a typical 55-litre fuel tank, drivers are £4.40 better off," says Paul Watters, head of AA Public Affairs.

"Asda announced on Monday that it was cutting its petrol prices to 124.7p the following day and, only then, did the other supermarkets respond nationally to lower wholesale costs."

Lagging behind

“This delay, otherwise known as the 'feather' effect, left the UK lagging behind other European countries. Last week, UK holidaymakers driving on the Continent were enjoying the savings of lower European wholesale prices - those who holidayed at home didn't.”

Fuel choice

Watters adds: “New car registrations on 1 September are likely to see more car owners switch to diesel to save fuel and money, and cut their CO2. With diesel prices at their lowest for three and half years, their decision to switch will feel even more justified.

“Although diesel drivers were short-changed around 2.5p a litre earlier this summer, when near-parity between the wholesale price of petrol and diesel failed to be reflected at the pump, diesel's current 4p to 6p-a-litre premium over petrol at the pump is considerably better than the 13p to 14p-a-litre additional cost that killed off the 'dash for diesel' in 2008.”

National and regional

Across the UK, Northern Ireland's average of 130.6p a litre is the most expensive for petrol. Together with Scotland (130.1p) and East Anglia (130.1p), they are the only parts of the country still above 130p a litre. Yorkshire and Humberside remains the cheapest for petrol this month, averaging 129.4p a litre.

East Anglia, averaging 134.5p a litre for diesel, knocks Scotland (134.4p) off its normal position as the UK's most expensive. Drivers across northern England are enjoying the cheapest diesel, with the North, North West and Yorkshire and Humberside all level at an average of 133.5p a litre