Motoring organisation the RAC is predicting that petrol prices will fall below £1 a litre in the new year.
If fuel prices fall below the £1 barrier in January it will be the first time in nearly six years they have been that low.
In recent months the price of crude oil has plummeted, leading to a gradual fall in prices at the pumps.
Currently, the average price for unleaded at supermarket pumps is £1.14 per litre, with diesel at £1.20 per litre.
RAC fuel spokesman Simon Williams said: “What’s currently happening at the pumps with falling fuel prices is something many motorists will not remember seeing before. Talk of prices going up like a rocket and falling like a feather could not be further from the truth as retailers have been quick to pass on savings at the forecourt since the RAC forecast on 6 December that prices were due to come down by 7p a litre for petrol and 6p for diesel.
The RAC’s monitoring of fuel prices shows the average price of a litre of petrol is 116.9p (14 Dec 2014 – the latest available price) – 13.89p a litre cheaper than the start of the year when it was 130.79p – and diesel is 15.91p cheaper – 122.33p a litre now compared to 138.24p in January. On 15 December 2014 the average supermarket price of fuel was 114.26p for petrol and 120.18p for diesel.
Simon Williams added: “The cost of going to visit family and friends this Christmas will be the cheapest it’s been for nearly five years, but the prospect of petrol going below £1 a litre in the new year is incredible, particularly when prices at the beginning of 2014 seemed to be heading ever upwards.
“Current forecasts are for average petrol prices to fall to below 110p a litre in the next fortnight and diesel to drop to under 116p. At these average prices across the country the cheapest retailers will almost certainly be selling petrol for around 105p a litre, or even lower.
“It is, however, important to realise that the oil and fuel market can always change due to a number factors, including the strength of the pound against the dollar and the global production of oil. If the current oversupply situation remains then it will clearly be good news for motorists and businesses that rely on the road network. With the United Arab Emirates energy minister saying OPEC will not cut production even if oil falls as low as $40 a barrel, we have every reason to think petrol at under £1 early in 2015 is a very real prospect.”
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