The average price of petrol in the UK has hit a four-year low, dropping below 120p a litre for the first time since December 2010.
According to government figures, the average cost for a litre of unleaded petrol now stands at just 119.83p - a nine per cent fall from the year high 131.11p recorded as recently as July.
Tumbling brent crude oil prices fell to a five-year low on Wednesday following a report from the Organization of Petroleum Exporting Companies (Opec) that slashed its global demand forecast for 2015.
Brent crude prices have plummeted 44 per cent from a year high of $115.71 per barrel in June to their current standing of $64.04. Falling prices have been exasperated by the decision from Opec’s gulf states last month not to cut down on production.
Petrol prices have subsequently fallen in recent months, yet while consumers will be undoubtedly be cheered by the cheaper prices in the run up to Christmas, some have accused retailers of not bringing petrol costs down in conjunction with oil.
Campaign group FairFuelUK has called for a full inquiry into secretive petrol pricing processes.
Furthermore, there are mixed views on how falling oil prices could affect the UK economy.
Goldman Sachs senior economist Kevin Daly told the Treasury Select Committee yesterday that “if [oil] prices remain at these levels, we’re likely to see a litre of unleaded petrol fall to between £1.05 and £1.10.”
Daly said it would provide a “significant stimulus” to the economy as consumers’ spending power increased.
Consultancy group Oxford Economics is forecasting the UK economy to grow by 2.6 per cent on average over the next two years as a result of the fall in oil prices.
However, some analysts that if oil prices do not recover inflation could turn negative, preventing the Bank of England from raising interest rates from historic lows.