The firm has conducted an analysis of the savings which will be made by UK consumers as a result of lower prices at the fuel pumps and found that motorists will save £146 a year on average from lower prices at the pump – equivalent to a 1.3p drop in the basic rate of income tax

The firm added that the saving is far greater than that of the recent energy price cuts, estimated to be around £0.5bn.

The firm’s research found that if petrol prices were to fall to £1 a ltireand remain at that level, this aggregate saving would increase to £7.2bn saved each year compared to 2014. That would be equivalent to the taxpayer benefit from a 1.7p drop in basic rate income tax.

However, it added that the north/south divide remains in benefits from lower prices at the pump and that the average Londoner benefits the least from the price falls.

Laith Khalaf, senior analyst, Hargreaves Lansdown, said: ‘Falling fuel prices will deliver substantial savings to the UK public, in aggregate more than a 1p cut in income tax would. This is an adrenaline shot delivered straight to the heart of the UK economy – the Great British consumer. The average household can look forward to saving almost £200 a year on car travel, if prices remain where they are.

‘Consumers can do one of three things with the extra money in their pockets; spend it, save it, or use it to pay down debt. In all likelihood we will see a combination of all three, and many UK businesses stand to benefit from the additional revenue generated by higher consumer spending power.'