RAC Fuel Watch data for December shows that the average price of petrol fell by more than 4p a litre in December – from 107.55p at the start to 102.89p by the close – the lowest price since December 2009.

The average price of diesel also dropped 3p a litre during the month – from 109.86p to 106.18p – cutting the cost of filling a typical tank by £2.56 and making it £6.91 cheaper than at the end of December 2014.

The RAC added that the falling price of diesel may also have contributed to a new record sales high with HMRC oil duty statistics for November showing the UK used 2.574bn litres of diesel, which is more than at any point since 1990. The figures also show combined sales of petrol and diesel were 2.7% up on October at 4.011bn litres and 0.3% up on the previous November. Petrol sales were down 1.6% (1.437bn litres) on October and down 4.1% compared to November 2014.

RAC Fuel Watch – which monitors the same data that retailers use – shows that the December reductions were fuelled by the falling oil price which underwent a 17% drop, with a barrel of oil coming down from $43.26 to $35.75 by the end of the month, taking it to a price last seen in June 2004. The barrel price tumbled to below $40 on Monday 7 December, paving the way for the sub-£1 litre, and has stayed below ever since.

RAC fuel spokesman Simon Williams said: “December was an excellent month for petrol car drivers with all four major supermarkets cutting the price of petrol to under £1 a litre on 11 December shortly after the RAC predicted it would happen. Unfortunately, despite the wholesale price of diesel being on average 2p a litre cheaper than that of petrol since 8 December, we didn’t see the pump price fall to the same level until a few days ago.

“Retailers have established a pretty good track record of passing on wholesale cost-savings at the pump over the period since the price of oil fell from $115 a barrel in June 2014. But not cutting the price of diesel when there was an opportunity to do so before Christmas has undermined that. While we still expect fuel prices to stay low for some time, it will be interesting to see how quickly pump prices go up again when the cost of oil rises. Of course, this tends to happen with little publicity in contrast to the fanfare that accompanies price reductions.”

He added: “For average prices of both petrol and diesel to reach the £1 a litre mark, it would require a further drop in the wholesale price of petrol to be passed on by retailers, and for diesel pump prices to more closely reflect the recent reductions seen on the wholesale market. If retail pricing more directly mirrored wholesale movements then the average price of diesel should move nearer £1 a litre, but sadly unleaded may rise due to the weakening pound.”