But data from RAC Fuel Watch also shows drivers should have seen a further 10p reduction had major retailers not upped their margins, the RAC says.

A 55-litre petrol fill-up has now dropped below the £90 mark for the first time since the start of May. This means that since unleaded peaked on 3 July at 191.53p almost 29p (28.64p) has come off a litre, a saving of nearly £16 on a full tank (£15.75).

A litre of diesel also reduced in September but only by 3.5p a litre, finishing the month at 180.16p. This is 19p cheaper than its all-time high price of 199.09p recorded on 25 June leading to the cost of tank falling £10 (£10.41) to under £100 (£99.09) – something drivers haven’t seen since late May.

The average price of unleaded at the big four supermarkets also fell nearly 7p (6.6p) a litre to 161.30p, but unusually this is only 1.5p lower than the UK average – normally it’s around 3.5p cheaper. Supermarket diesel, however, only came down 1.4p to 178.56p which is 2p less than the UK average drop of 3.58p – diesel is also normally 3.5p cheaper at one of the big supermarkets.

The record high pump prices arose due to oil being trading around $130 a barrel in mid-June. At the end of September however, oil was back down to $87.96 – falling 5% in September alone. The Sterling to dollar exchange rate – the other important factor in determining the price drivers pay at the pumps due to wholesale fuel being traded in dollars – fell to $1.1163 having recovered from its all-time low of $1.03 on 26 September.

RAC fuel spokesman Simon Williams said: “Despite September seeing the sixth biggest ever drop in the price of petrol drivers really should have seen a far bigger drop as the wholesale price of delivered petrol was around 120p for the whole month. This means forecourts across the country should have been displaying prices around 152p given the long-term margin on unleaded is 7p a litre.

“In stark contrast to this RAC Fuel Watch data has shown margins to be around 17p a litre – a huge 10p more than normal. And the average price of petrol at the big four supermarkets is only 1.5p lower than the UK average – less than half what it usually is which points heavily to them not playing fair with drivers.

“This is backed up by the fact that Morrisons, which was charging an average of 162p a litre for petrol at the end of September, is currently running a 5p a litre off promotion for customers spending £40 in store. This type of promotion tends only to be seen when supermarkets are benefitting from lower wholesale prices.

“While there are no rules on what retailers can charge for their fuel, it remains the case that the supermarkets are extremely influential in determining the UK average pump prices as they sell so much fuel.

“However, as many drivers will have noticed there lots of smaller forecourts which are now selling fuel much cheaper than the supermarkets. We would urge everyone to shop around for the best deals rather than simply assuming the supermarkets are the lowest because they have been in the past.

“And despite the plunge in the value of the pound the fact oil is trading under $90 a barrel should lead to better prices at the pumps if only more retailers would pass on the savings they’re currently getting every time they buy new stock.

“But it’s also important to realise there is the potential for things to change quickly due to the weakness of the pound. Having just dropped to a record low against the dollar and still only trading at $1.1, all we would need is for the price of oil to start rising to cause both petrol and diesel prices to rapidly start going back up again.

“With oil producer group OPEC and its allies meeting today much will depend on how big their expected production cut turns out to be. But it goes without saying that any further output restriction will not be good for drivers as it will inevitably – as intended – push up the barrel price, ultimately making fuel more expensive.”

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The average price of a litre of unleaded is now under 170p (169.8p) for the first time since May, with the price cuts made by retailers in August leading to the average cost of filling a 55-litre petrol car dropping £6.77 in the month, from £100.16 at the start of the month to £93.39 at the end.

But the RCA says this reduction only tells part of the story as, with the average weekly delivered wholesale price of petrol falling through the month to reach just 124.08p last week and allowing for a significant retailer margin of 10p per litre, average forecourt petrol prices should actually be around the 161p mark.

The last time the delivered wholesale price of petrol was at its current level was in late April, when retailers were charging on average around 162p per litre.

Drivers of diesel vehicles saw 8.35p coming off the average price of a litre with the pump price ending August at 183.71p, a price the RAC considers is a fairer reflection of wholesale prices. This means it now costs £4.59 less to fill a 55-litre car than it did a month ago, with costs down from £105.63 to £101.04.

The RAC’s analysis suggests that supermarkets, which have traditionally led on fuel prices, are not necessarily the cheapest places for drivers to fill up with unleaded, with enterprising independents in some locations choosing to undercut them and charge a fairer price for the fuel.

The biggest supermarkets were charging just 1.62p below the average price of petrol last month (168.18p), compared to the typical 3p. It is also the case that supermarkets in some parts of the country appear to be charging much less for the same fuel than in other areas.

While the cost of oil – the biggest contributor to wholesale petrol and diesel prices – fell significantly in August, down $7.67 to end the month at $92.36, dark clouds are beginning to gather once again.

OPEC+, which represents many of the biggest oil producing nations, may choose to cut production at a meeting next week. If it does, oil prices may begin to rise once again. Sterling also had its worst performance against the US dollar in August since October 2016, with a pound worth just $1.16 by the month’s end, which – as fuel is traded in dollars – makes it more expensive to purchase on the wholesale market.

Analysis by the RAC in August also revealed that the UK is one of the least generous countries when it comes to supporting drivers with high petrol and diesel prices. As an example and by way of contrast, the French government actually increased its discount on fuel to 30 cents from 15 cents on 1 September, which will result in pump prices under the equivalent of £1.50 a litre across the country.

RAC spokesperson Rod Dennis said: “Twelve pence a litre is a lot to come off prices in a single month so there’s no doubt things could be worse, but in reality drivers of petrol vehicles are still invariably getting a raw deal at the pumps. For whatever reason, major retailers are choosing not to pass on in full the reductions in the wholesale price of unleaded they’ve been benefiting from for some considerable time now – and this continues to mean drivers are often paying much more every time they fill up than they should.

“By the end of August wholesale prices were lower than they were at the start of the month, so even factoring in buying cycles there is a very strong case for the biggest sellers of fuel to cut their forecourt petrol prices further. Allowing for a generous 10p a litre margin, we should be seeing the petrol sold for around 161p a litre.

“Some big supermarket sites aren’t too far off charging this – but there’s a real postcode lottery out there with prices varying wildly depending on where a driver is in the country. Drivers must shop around for the best deal they can, and we applaud those independent retailers who are doing their best to charge a fairer price for fuel and support their local communities through this incredibly expensive time.

“There’s also no getting away from the fact that fuel can make up a huge chunk of a household’s monthly expenditure alongside energy costs. With many people heavily dependent on the car – whether that’s to transport children now new school terms are underway again, or to see friends and family in different parts of the country – drivers need all the help that they can get.

“We urge the incoming Prime Minister to heed our calls for more financial assistance for drivers, such as a deeper cut in fuel duty, and to look carefully at the much more generous packages of help being offered to those in other countries across Europe.”

Pump price changes by month – recent price cuts don’t make up for the rises earlier in the year

All prices are average in pence per litre

Regional pump prices compared

Unleaded

Diesel

Find out more about UK petrol and diesel prices on the RAC website.

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Out of 13 EU countries that have cut tax on petrol in order to ease the spiralling costs faced by drivers every time they fill up, only one – Luxembourg – has done less than the UK Government, with a duty cut in April worth the equivalent of 4.52p compared to the 5p duty cut announced at the UK Budget in March. It’s a similar picture for diesel, with only Croatia doing less for its drivers than the UK, with a cut worth 4.5p.

The UK Government’s intervention back in the Spring looks paltry when compared to most other European nations, with Germany taking the equivalent of 25p a litre in tax off per litre of petrol on 1 June, Italy 21p, Portugal 16p and both Ireland and the Netherlands nearly 15p, according to the RAC’s figures. Ireland ranks fifth when it comes to both petrol and diesel cuts.

Table showing Petrol comparison: https://datawrapper.dwcdn.net/ybRVm/1/

Tables showing Diesel comparison: https://datawrapper.dwcdn.net/RQzWH/1/

As an alternative to cutting fuel duty, governments of other countries in the EU have introduced fuel discounts at forecourt tills with Spain taking off 20 cents (about 17p) and France 18 cents (about 15p), while some fuel retailers including TotalEnergies in France and BP Spain have discounts running of up to 40 cents per litre (about 33p).

Of the remaining 15 EU states that haven’t taken steps to lower pump prices since March, all but six already charge less fuel duty than the UK even after the UK cut fuel duty by 5p in March’s Spring Statement.

Although UK pump prices have finally started to fall in recent days – after significant pressure from the RAC on retailers to reflect the fact wholesale fuel costs have been falling for seven straight weeks – the average price of a litre of both petrol and diesel is well above the current EU averages of 159p and 161p respectively.

The UK is currently the joint-second most expensive country when it comes to the average cost of a litre of petrol (186p) – behind only Finland (190p) with Denmark also at 186p – and the second most expensive for diesel at 195p per litre, with only Sweden charging more (201p).

The only apparent silver lining is that drivers heading abroad with their own cars this summer will benefit from lower pump prices on the other side of the Channel. The cost of filling a 55-litre family car with petrol in France, for instance, is around £12 cheaper than it is in the UK (£89.66 compared to £102.30), and for diesel is £17 cheaper (£90.20 compared to £107.25 in the UK).

RAC fuel spokesman Simon Williams said: “This analysis lays bare an uncomfortable truth for the UK Government – that compared to other European countries, it’s pretty much done the least to support drivers through the current period of record high fuel prices. The result is the UK being one of the most expensive places to fill up and putting it above other countries that have historically charged more for fuel than UK retailers do, including France and the Netherlands.

“Perhaps even more frustratingly, those countries that have not cut tax on fuel at all since March – including Greece and Austria – are still cheaper than the UK. At the opposite end of the spectrum, some other nations have done a huge amount with Portugal cutting duty an incredible seven times since March, and France and Spain both offering significant discounts on fuel at the checkout.

“Drivers might also be surprised to learn that some major oil companies and fuel retailers – including BP in Spain and Total in France – have decided to introduce their own discounts, something that’s unheard of here. At least UK drivers venturing abroad this summer will be pleasantly surprised that prices are in some countries significantly lower than at home.

“The cost-of-living crisis shows no signs of coming to an end anytime soon and it’s frustrating that repeated calls to the UK Government for more support are falling on deaf ears. UK pump prices might be finally starting to fall, but the reductions so far are too little and too late, given the massive wholesale price drops retailers have been benefiting from for nearly two months.

“Drivers, many of whom depend heavily on their vehicles, need more help and they need it now.

“For any drivers heading to Europe in their own cars this summer, ensuring they have a comprehensive level of European breakdown cover is also vital to give complete peace of mind.”

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RAC fuel spokesman Simon Williams said: “Inexplicably, fuel prices rose yet again yesterday with petrol hitting a new all-time high of 191.24p per litre and diesel just short of another record at 199.01p.

“We can see absolutely no rhyme or reason why average forecourt prices are still going up, given that the wholesale price of both fuels has been falling for weeks.

“Drivers up and down the country have a right to know why they’re having to pay what they are for fuel when the costs to retailers right now are so much less they were a few weeks ago. Next Thursday’s announcement by the CMA following its review will no doubt be watched very closely.

 “Suggestions that the Government might be about to announce more support for hard-pressed drivers are welcome. A cut to the price of forecourt fuel really can’t come soon enough.

“If it’s a further fuel duty cut that the Chancellor decides on, it’s absolutely vital that this is passed on in full immediately by retailers to give drivers some respite from these historic high prices. It’s also vital the Government monitors the wholesale market and closely scrutinises retailer margins.”

On Monday the RAC had expressed hopes that pump prices had peaked for the time being as petrol crept only very slightly higher than the day before at a new record average price of 191.1p.

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