Pump prices have continued to fall through May as lower wholesale prices and a stronger pound have helped push down the price for retailers. The average price of unleaded was 132.0 pence per litre (ppl) at the end of May, around two ppl lower than 30 days prior. Diesel drivers also experienced lower prices, with the average diesel price falling to 138.2ppl, down just under two ppl across the month.
Prices were last this low all the way back in September 2021.
A strengthening pound has helped push prices lower. You can currently get 1.35 US dollars to the Great British Pound. This is up from 1.25 at the start of the year, representing an 8% increase. As petroleum products are traded in US dollars, a stronger pound means lower prices here in the UK.
Uncertainty around US trade tariffs has weighed on oil markets and global growth, which in turn has caused prices to fall. Additionally, OPEC+, the group of oil-producing nations, has been unwinding its supply cuts, releasing more crude oil into the market: the result is lower crude oil prices and lower petrol and diesel prices.
Supermarkets have maintained their prices around 3ppl below the national average for both unleaded and diesel throughout May.
Motorists in Northern Ireland would have been most likely to notice the drop as unleaded prices fell 2.4ppl on average across May. While the Northeast of England only enjoyed an average drop of 0.80ppl.
Drivers in the East and West Midlands, as well as those in the North West, are the most likely to save by shopping around. These regions have the widest spread of pricing in the country.
Where will prices go in June?
Despite prices being at 4-year lows, there is little reason to expect a sudden rebound. In fact, global banks such as Goldman Sachs are forecasting crude oil prices to drop further. They recently maintained their Brent forecast at $60/b for the balance of 2025.
According to data supplied by Portland Pricing, a wholesale fuel data platform, retail spreads (the difference between wholesale and retail prices) are sitting marginally above 12-month averages.
Our expectation is that the market will remain relatively flat over the next few weeks, with a chance of some lower prices. However, as always, local factors can influence pump prices.
It’s also worth noting that Brent crude prices increased in June by $3/barrel to over $65/barrel. If this trend continues, prices at the pump may rise even higher.
Competition
The month PetrolPrices is running a competition to win a £50 Amazon voucher.
Simply purchase fuel in June and email the receipt to [email protected] to enter.
The full Terms and Conditions can be found here.
good to hear petrol prices likely to stay the same or even drop
Today’s Israel/Iran situation has already caused my preferred local price to rise by 1ppl on unleaded.