UK petrol prices hit surprising milestone to begin 2026
UK petrol prices have hit a milestone low to begin 2026, data shows.
UK petrol prices have fallen to a milestone low in the first month of 2026, it has been found.
UK prices were, on average, 3p per litre lower in January 2026 than in the final month of 2025.
It doesn’t seem like a huge change on its own, perhaps, but this drop makes petrol as cheap in the UK as it’s been since 2021, before prices rose following Russia’s invasion of Ukraine in February 2022.
Data from RAC Fuel Watch shows that the UK’s average petrol price in January was 131.91p, making the first month of 2026 the first occasion since July 2021 that petrol has been under 132p per litre. Then, a litre of unleaded cost, on average, 131.81p per litre.
“Seeing the price of petrol dip under 132p is a genuine boost for drivers, rewinding prices to those we last saw four and half years ago,” said the RAC’s head of police, Simon Williams.
“And with even cheaper prices available depending on where drivers fill up, this is a positive start to the year for household budgets, especially so soon after Christmas.
“The Competition and Markets Authority’s 2025 annual road fuel monitoring report published in December said competition in the sector had not strengthened and retailer margins remained at historically high levels, and in some cases had increased.
“It also confirmed, contrary to what the fuel retailers trade association had been arguing, that increased operating costs were not the reason for average margins on petrol and diesel being higher.
“Our analysis of RAC Fuel Watch data also shows a similar picture of retailer margins. So, had retailers passed on more of the savings they’ve benefitted from when buying new fuel supply on the wholesale market, the January price reductions would probably have been bigger.”
The cause of the drop in at-the-pump petrol prices has been falls in the cost of oil on the wholesale market. On 7 January, the price per barrel dropped below $60 (around £45) for the first time since February 2021.
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