Petrol and diesel prices have fallen for the first time in months but the price cuts may be short-lived, the RAC has warned.

March’s fall in pump prices may be “rather short-lived”, as crude oil prices are once again starting to edge up

The average price of a litre of unleaded dropped nearly 3.6p during March, finishing the month at 136.03p compared to 139.62p at the start. That’s the lowest level seen since late November 2024 and means drivers are now paying £74.82 to fill a typical family sized car with a 55-litre tank; nearly £2 less than they were at the beginning of March.

The average diesel price fell just as sharply, coming down 4p in March from 146.46p to 142.51p, its lowest since early December 2024. This makes the cost of filling a family-sized car with diesel stand at £78.38; £2.17 less than at the start of March.

Drivers in Northern Ireland continue to see the lowest prices overall, with prices topping out at 137p a litre for petrol and 141p for diesel.

The fall in pump prices is the result of the cost of oil dipping below $70m, with wholesale fuel prices coming down soon afterwards; both due to the growing concern about the global economic outlook.

But the RAC said the drop may be “rather short-lived”, as crude oil prices are once again starting to edge up. If this continues, it’s likely to lead to higher wholesale costs and the end of falling pump prices.

The RAC has also said that pump prices should have dropped further in March, given the extent to which wholesale costs have fallen. Through most of the month, these costs were at their lowest levels since early October, but with some retailers taking larger margins on the fuel they sell, this stopped pump prices coming down any further.

The UK’s competition watchdog also remains concerned about fuel margins – the latest interim monitoring report from the Competition and Market Authority (CMA) warns that fuel margins remain stuck at high levels, impacting prices paid by drivers at the pump.

All eyes are now on the fuel finder scheme, set to launch this year as a potential ‘game changer’ for drivers – allowing them to find the cheapest fuel prices while boosting competition between fuel retailers.

The new fuel monitoring function will also provide ongoing scrutiny of prices to encourage effective competition between retailers and help keep prices low for drivers. The next CMA fuel monitoring report will include data gathered using the watchdog’s new information gathering powers, granted at the end of 2024.

RAC head of policy Simon Williams said: “We hope the CMA’s new powers to scrutinise prices will be the catalyst for fairer prices everywhere, along with the Government forcing retailers to publish prices within 30 minutes of changing them.”

The RAC has also warned drivers to shop around as its analysis of local pump price data shows that some supermarket and even non-supermarket forecourts are charging under 126p for a litre of unleaded – a whole 10p a litre less than the UK average, and a saving of nearly £5 a tank on a full fill-up. Diesel can be found for 131p a litre in some locations, 11p less than the UK average – a saving of £6 on tank.