Drivers could be in line for an update to petrol and diesel prices within days.
The RAC says pump prices should continue falling this weekend and into next week after the price of Brent crude dropped to around $74 a barrel on Friday morning, having briefly fallen below levels seen before the outbreak of hostilities in the Middle East. Brent crude was trading at around $73.94 a barrel early on Friday, down sharply from the highs of well over $100 seen during the conflict and on course for a hefty weekly loss as fears of major supply disruption eased.
The retreat in oil prices has prompted fresh calls for fuel retailers to pass on savings quickly to hard-pressed motorists.
RAC head of policy Simon Williams said: “On the back of the lowest oil price since before the Iran war started, drivers should see the average price of petrol fall below 150p in the next week or so. If this happens, unleaded will be at its lowest price since March 26.
“Diesel, having dropped below 170p today for the first time since March 22 as shown in the Government’s Fuel Finder data, ought to go back under 160p. We urge retailers to pass on the savings they’re benefiting from on the wholesale market to drivers straightaway.
“Before the war began we had an oil price of $70 which translated to an average petrol price of 132p and 141p for diesel.”
According to RAC figures, average petrol prices have already fallen 7.2p a litre since peaking at 159.53p on May 28, while diesel has dropped 22.17p a litre from its April high of 191.54p. On Thursday, average forecourt prices stood at 152.32p for petrol and 169.37p for diesel.
The latest falls follow a dramatic reversal in global oil markets after fears of disruption to supplies through the Strait of Hormuz began to ease. Tankers have resumed moving through the key shipping route and traders are increasingly betting that global supplies will remain plentiful.
The drop has sparked renewed scrutiny of fuel retailers, with consumer champion Martin Lewis warning motorists to keep an eye on pump prices.
He said this week: “Now is the time to watch for price gouging. It normally happens when prices drop after a peak.”
He later added: “No accusation just saying it needs monitoring.”
The Competition and Markets Authority is already carrying out enhanced monitoring of the fuel market, tracking pump prices, retailer margins and wholesale costs amid concerns motorists may not always receive the full benefit of falling oil prices.
The watchdog has repeatedly examined whether reductions in wholesale fuel costs are being passed through fairly to drivers, following concerns about weak competition in parts of the market.
Motoring groups have long complained about the so-called “rocket and feather” effect, where pump prices shoot up rapidly when oil rises but drift down far more slowly when wholesale costs fall.
The AA has also argued that sustained reductions in wholesale fuel and oil prices should be reflected at the pumps, particularly while households remain under pressure from the wider cost-of-living squeeze.