Average price of petrol 'cheaper than diesel'

The average price of petrol has returned to being cheaper than diesel, the RAC said.

Two pence per litre was shaved off petrol prices at the pumps during last month, according to the RAC Fuel Watch report.

Filling up a 55-litre family car is now £1 cheaper than at the start of September.

Diesel remained around the 110p-a-litre mark, meaning it is more expensive than unleaded (109.63p-a-litre), having fallen below petrol in July for the first time since the summer of 2001.

RAC fuel spokesman Simon Williams said: "Petrol has now returned to its traditional position of being cheaper than diesel. This is primarily due to lower demand for unleaded as a result of the US summer holiday driving season finishing at the end of August.

"A secondary factor is that the diesel wholesale price has stayed stronger than petrol because, in the run-up to winter there is now less diesel in the marketplace. More oil from that part of the barrel is being used to produce more profitable domestic heating oil."

Since the start of July the average forecourt price of unleaded has dropped 7p-a-litre from 117p, making a tank £4 cheaper. Diesel, however, has plummeted 10p a litre from 120p to 110.36p, giving drivers a saving of around £5.65 every time they fill up from empty.

The cost of wholesale unleaded fell 2% in September, which the RAC predicts will lead to further reductions in pump prices of at least 2p-a-litre within the next fortnight.