Petrol prices could fall to as low as £1.20 a litre, following a series of price reductions for first time in two-and-a-half months.
last week's figures saw the first falls week-on-week since June 6 when petrol was an average of £1.31 per litre in the UK.
It had since risen every week until it reached £1.34 in mid-August.
Tony Redondo, Founder at Newquay-based Cosmos Currency Exchange, said prices could drop to as low as £1.20 a litre: "This rare, good news for UK motorists has a chance to get even better. Global oil prices have dropped to $63/barrel, down 13.79% on last year, on weaker demand from China, India, Brazil, and OPEC+ production increases, and oil prices are forecast to fall to $58 in the fourth quarter of this year and to $49 a barrel by March 2026.
"This could see prices at the pump in the UK drop to £1.20-£1.25 a litre. The backdrop to these forecasts includes global growth slowing due to Trump’s tariffs, China's EV transition reducing oil demand, and structural oversupply.
"However, in an unpredictable world, any sharp increase in geopolitical risks could reverse this trend quickly, but the fundamentals point to lower oil prices ahead."
Samuel Mather-Holgate, Independent Financial Adviser at Swindon-based Mather and Murray Financial adds: "After the turmoil in the Middle East, finally some respite for motorists. It doesn't look enough, but there is some good news on the forecourt. Now that the truce between Iran and Israel looks to be holding, global supply has resumed at normal levels and this commodity likes that certainty.
“Of course, with the tariffs kicking in, the US economy could tank later this year, and that could also be suppressing prices. The trajectory of the oil price is without doubt linked to the success or failure of Trump's economic policies.”
Rob Mansfield, Independent Financial Advisor at Rootes Wealth Management, has also welcomed the drop, saying: “It's always nice to drive up to the pump and have a lower price than you expected."
But, Kundan Bhaduri, Entrepreneur at London-based The Kushman Group, said Brit drivers are still facing some of the highest fuel prices in Europe.
He adds: "Global oil prices have retreated from recent highs as US inventory builds and Chinese economic data disappoints, but this ain't no trend.
"Petrol prices remain hostage to geopolitical theatre, refinery margins, and a Chancellor who treats fuel duty like her personal piggy bank."
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The news comes as the first electric car models eligible for £3,750 purchase grants have been announced.
Drivers buying either a Ford Puma Gen-E or e-Tourneo Courier will be entitled to the discount, the Department for Transport (DfT) said.
The £3,750 price reduction is the maximum available under the Government’s £650 million electric car grant scheme.
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