Why Diesel Just Recorded Its Biggest One Month Price Fall Since 2000

Filling a diesel car cost around £9 less at the end of June than it did at the start, after the pump price of diesel fell by nearly 17p a litre in a single month. That is the biggest monthly drop diesel has seen since records began in 2000, and petrol drivers enjoyed sizeable savings too. If you run a diesel, this was the cheapest your fuel has been in months.

The figures come from RAC Fuel Watch, which tracks pump prices across the UK. They show a rare stretch of falling costs after a spring in which fuel prices climbed sharply. The question now is how long the relief lasts, and where drivers can find the very cheapest fuel.

The Numbers Behind June’s Fuel Fall

Diesel averaged 183.75p a litre at the start of June and tumbled 16.6p to 167.14p by the end. That beat the previous record monthly fall, a 11.92p drop in May 2023, by almost 5p. For a driver filling a 55 litre tank, the cost came down from £101.06 to £91.93, a saving of around £9 every fill up.

Petrol fell too, though less dramatically. The average price dropped 7.97p from 159.37p to 151.40p, which RAC data shows was the seventh largest monthly fall in more than 26 years. That trimmed the cost of a 55 litre petrol tank from £87.65 to £83.27, saving about £4.40 each time you fill.

There is a further quirk worth knowing. The most commonly seen price on forecourts, what analysts call the modal average, was 149.9p for petrol and 169.9p for diesel. So while the national mean sat at 151.40p for petrol, plenty of drivers were already seeing prices below 150p.

Why Prices Dropped So Fast

The fall traces back to the oil market. A barrel of oil slid from $94.98 at the start of June to just $72.92 on 30 June, driven by a deal between the United States and Iran to end their conflict. When the wholesale price of crude drops that sharply, retail fuel usually follows within a few weeks.

RAC head of policy Simon Williams put June’s improvement in context. “June has been a far better month for drivers on the back of the announcement of a deal between the US and Iran to end the conflict,” he said. “The price of oil has fallen dramatically and prices at the pumps have reflected that.”

He also urged drivers not to lose perspective. Diesel had rocketed 49p a litre between the end of February and 15 April, when it peaked at 191.54p, a rise of more than a penny a day. So even after June’s record fall, fuel remains far more expensive than it was before the spring spike. At the time the conflict began, drivers were paying around 132p for petrol and 142p for diesel.

Where the Cheapest Fuel Is Right Now

The big four supermarkets led the diesel reductions, cutting their average by 19p from 182.37p to 163.28p, though their petrol cut of around 7p was slightly smaller than the UK wide fall. Motorway forecourts stayed the most expensive, with unleaded down to 171.67p and diesel at 187.24p, so avoid filling up at services if you can.

Smaller independent forecourts often undercut the supermarkets. At the end of June, the RAC pointed to GW Holmes at Etherley Moor Garage in Bishop Auckland selling petrol at 139.7p, while the cheapest diesel was 152.9p at Linthouse Lane Service Station in Wolverhampton, matched by two Sainsbury’s sites in the same city. Northern Ireland remained the cheapest region overall, with average petrol at 147.5p and diesel at 162.6p.

Finding those prices is easier than it used to be. The Government’s Fuel Finder scheme now requires retailers to report their prices within half an hour of any change, feeding live data into apps and comparison tools. The RAC credits that transparency with helping push June’s prices down, and drivers can use free apps to compare the cheapest nearby forecourts before setting off.

It helps to understand what you are actually paying for at the pump. On every litre, fuel duty takes a fixed 52.95p, and VAT at 20 per cent is then charged on top of the whole price. The rest covers the wholesale cost of the fuel, delivery and the retailer margin. Because duty and VAT make up such a large share, a fall in the oil price only moves part of the total, which is why pump prices never drop as fast as drivers would like.

Retailer margins have come under scrutiny. The Competition and Markets Authority has repeatedly found that fuel retailer margins widened in recent years, meaning forecourts kept more of each litre than they used to. Its work led to the Fuel Finder scheme, designed to force transparency and sharpen competition. The RAC has argued that when wholesale costs fall, retailers should pass the savings on quickly rather than banking them.

The gap between diesel and petrol also tells a story. Diesel is usually pricier than petrol at UK pumps, and it spiked hardest during the spring, which is why June record fall still leaves it above petrol. Drivers weighing up their next car should factor in not just fuel economy but the pump price gap, which has swung widely over the past two years.

Is There More to Come?

Williams suggested there is a little further to fall if oil stays low. “As things stand, petrol should dip under 150p soon and diesel ought to get to below 160p, but we would need the price of oil to fall further to see a return to the pre-conflict prices,” he said. With oil in the low $70s, only about $10 above the average of the first two months of the year, the direction looks favourable for now.

That said, pump prices remain sensitive to global events. Any fresh flare up in a major oil producing region could reverse June’s gains quickly, as the spring spike showed. Drivers hoping for a return to 132p petrol should treat that as a best case rather than a certainty.

How to Cut Your Own Fuel Bill

Start by shopping around. A free fuel finder app can show the five cheapest forecourts within a short radius, and the gap between the dearest and cheapest sites in a single town can be 10p a litre or more. Fill up at supermarkets or independents rather than motorway services, and keep an eye on Northern Ireland style pricing if you live near a cheaper region.

Beyond price hunting, smoother driving pays off. Gentle acceleration, reading the road ahead, removing roof boxes and keeping tyres correctly inflated all cut consumption. On a diesel that now costs around £92 to brim, trimming even a few percent from your usage adds up across a year. June handed drivers a welcome break at the pumps, and using these habits helps you hold on to more of it. For more fuel saving guidance, see Motoring Chronicle.

Campaigners have long complained about what they call rocket and feathers pricing, where pump prices shoot up quickly when oil rises but drift down slowly when it falls. June bucked that trend, with retailers passing on the wholesale drop faster than usual, something the RAC linked to the new transparency rules. Over a full year the sums are meaningful. A driver filling a 55 litre diesel car once a week saved close to £9 a tank by the end of June compared with the start, which adds up to hundreds of pounds a year if prices hold. That is a strong reason to keep comparing forecourts rather than filling up on habit at the same station every week.

Diesel drivers in particular should shop around, because the spread between the cheapest and dearest forecourts was unusually wide at the end of June as retailers cut their prices at different speeds. Some independents and Northern Ireland sites were already well below the national average while others lagged, so a short detour or a quick check on a fuel app could save several pounds on a single fill.

Sources:

• RAC: Diesel drops by record 17p a litre in June
• RAC Fuel Watch