At last some good news for drivers...

By Nick Gibbs

25th October 2008

Fuel prices have finally fallen back below the £1 per litre mark. Supermarket chain Asda announced the good news to cash-strapped motorists, four months after a record rise in pump prices made headlines.

The roller-coaster rates have now dipped even faster, from a 119.5 pence per litre high in June, to 99.9p now for one litre of unleaded. The price is fixed across all of Asda’s 457 garages.

Rival chain Morrisons was quick to match the new rate, and other supermarkets are set to follow. Diesel is now also cheaper, at 110.9p per litre at Asda and 111.9p at Morrisons.

The slashed prices will make an obvious dent in most motorists’ fuel bills. An owner of the new Volkswagen Golf, for example, can expect to pay £10 less per fill, rising to £243 over 10,000 miles – enough to buy 18 months’ worth of road tax.

That’s compared to peak prices in the summer, while diesel drivers, who were paying 133.1p a litre on average, can expect to save a similar amount.

The good news coincides with a dramatic dip in the cost of crude oil, from its peak of 7 (£85) a barrel in July to a low of (£39) as of last Thursday, suggesting there are more savings to come. The October edition of the AA Fuel Price Report has revealed that prices fell by a record rate at the end of September.

The data, which was collated prior to the most recent round of supermarket cuts, revealed an average drop of 6.5ppl, compared to a maximum increase of 5.6 pence in June.