UK drivers have reason to celebrate as petrol prices have fallen to their lowest level in over four years. In January 2026, the average price of unleaded petrol dropped below 132p per litre for the first time since July 2021.
How Low Have Prices Fallen?
According to the latest data:
- Unleaded petrol: 131.8p per litre (average)
- Diesel: 140.8p per litre (average)
This represents a drop of approximately 3p per litre compared to December 2025, saving the average driver around £1.50 per tank.
Why Are Prices Falling?
Several factors have combined to push fuel prices down:
1. Oil Price Collapse
The wholesale price of oil dropped below $60 (£45) per barrel in early January 2026 - the lowest since February 2021. This was before Russia's invasion of Ukraine sent prices soaring.
2. Global Demand Concerns
Economic slowdowns in major economies, particularly China, have reduced global oil demand, putting downward pressure on prices.
3. Increased Supply
OPEC+ has been gradually increasing production, while US shale oil output remains strong, creating a well-supplied market.
Regional Price Differences
Not all UK drivers are seeing the same savings:
| Region | Avg Petrol Price |
|---|---|
| Northern Ireland | 129-130p |
| North East England | 130-131p |
| Scotland (cities) | 131-132p |
| Midlands | 132-133p |
| South East | 133-135p |
| London | 134-137p |
Will Prices Keep Falling?
Industry analysts expect prices to continue falling in the short term as wholesale reductions work through the supply chain. However, several factors could reverse the trend:
- Fuel duty changes: The 5p temporary cut expires in March 2026
- OPEC decisions: Production cuts could tighten supply
- Geopolitical events: Conflicts affecting oil-producing regions
How to Find the Cheapest Fuel Near You
With prices varying by up to 8p per litre between regions (and even more between individual stations), shopping around has never been more important.
Use our fuel price map to find the cheapest petrol and diesel near your location. Supermarkets like Asda, Tesco, and Sainsbury's typically offer the lowest prices, followed by Costco (for members).
The Bigger Picture
While current prices are welcome relief for motorists, they remain significantly higher than pre-2022 levels when petrol averaged around 125p per litre. The freeze on fuel duty has helped, but drivers are still paying more at the pump than they were five years ago.
That said, January 2026 marks a turning point - proof that fuel prices can fall as well as rise, and that relief is possible when market conditions align.