Petrol price 'hits three-year low'

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The average cost of petrol at the beginning of this week was 87.79p a litre compared with 88.27p at the end of December 2005. Diesel is now averaging 99.72p a litre - the lowest price since November 2007.

With petrol hitting a record high of 119.7p a litre in July this year, a UK driver is on average now paying nearly £16 less to fill up a typical 50-litre tank than during this last summer. A family with two petrol cars is now spending £68.39 less a month on fuel.

The AA said new retail fuel sales figures released by the Government showed that petrol sales in July-September 2008 - the period of peak prices - fell by 8.2% cent compared to the same time last year.

Retail sales of diesel rose 1.8% in the same period, reflecting the desperate attempts of hard-pressed UK drivers to switch to more fuel-efficient vehicles and reduce their costs.

The AA added that the figures appeared to show that many drivers drifted away from supermarkets to buy their petrol elsewhere during the period of peak fuel prices this summer. Localised price-matching strategies produced uniform pump prices across many towns, reducing the incentive for drivers to go to traditionally cheaper supermarkets.

AA public affairs head Paul Watters said: "Families are making substantial savings from the fall in pump prices in recent months, although AA/Populus research shows that many are still cutting back - some even more deeply through fear or the impact of the economic slowdown.

"Next year could see some intriguing changes to fuel-buying habits as more small independent petrol stations match or undercut supermarket prices to draw customers to more profitable small shop sales.

"Retail sales figures during the late summer seem to indicate that drivers will desert supermarket filling stations in significant numbers if there is no price difference to lure them in."