Why Fuel Prices Go Up and Down

What really moves the pump price

UK fuel prices are finally moving in a direction that helps rather than hurts household budgets. Average petrol fell to 131.91p per litre in January 2026 - the cheapest since July 2021 - offering welcome relief after two turbulent years. Behind that improvement sits a cocktail of softer global oil prices, improving supply, and a new push for transparency at home.

From 2 February 2026, every petrol station in the UK must report price changes within 30 minutes to the government-backed Fuel Finder Scheme. That live data powers websites and apps so you can check the cheapest nearby forecourt before you set off. Early evidence is encouraging: supermarket forecourts were already saving drivers around 3p per litre in late 2025 - roughly £4.50 per tank for many family cars - and real-time transparency should sharpen competition further.

There is more at play than local competition. UK prices closely track global crude markets. When oil dips, forecourts usually follow, sometimes with a lag. When oil rises, the effect can be swift. Sterling also matters. Because fuel is traded in US dollars, a 3-5% fall in the pound can add a similar percentage to import costs even if oil prices do not change. With the UK reliant on imports and limited refining capacity, currency swings can nudge pump prices up or down faster than expected.

Margins remain part of the story too. Regulators highlighted elevated retailer margins through 2025, suggesting competition was not working as effectively as it should. Transparency is designed to fix that by making it easy to shop around. If 2025’s average petrol price of 135.69p is a guide - down from 142.23p in 2024 - there is room for cautious optimism, provided global markets stay cooperative and domestic competition strengthens.

Smart savings start before you reach the forecourt - check prices on your phone and plan your fill.

Who this helps most

If you drive regularly for work, school runs or weekend visits, price transparency is money in your pocket. Commuters, delivery drivers, carers and families in suburban or rural areas often clock the most miles and stand to benefit most from small per-litre savings. Urban motorists gain too, especially those choosing between several local forecourts. Budget-conscious students and new drivers will also find the clarity useful when planning monthly costs. Even if you drive infrequently, knowing when and where to fill up can trim costs without changing your routine.

Your choices to take control now

1. Use the Fuel Finder website or app before every fill.

2. Compare supermarket and independent forecourts within a short detour.

3. Time refuels midweek when prices and queues can ease.

4. Drive smoothly - gentle acceleration often saves noticeable fuel.

5. Check tyre pressures monthly to cut rolling resistance.

6. Avoid premium petrol unless your car specifically needs it.

7. Combine trips to reduce cold starts and short journeys.

8. Use loyalty points or cashback cards if they beat nearby prices.

Small habits compound - 1-2p per litre saved each time adds up over the year.

What it costs and what you gain

Who is eligible and what to check

There is no eligibility barrier to using price transparency - every UK motorist can check live forecourt prices and choose the best value within practical range. The only requirement is access to a web browser or app on your phone. If you drive a vehicle that specifies a minimum octane, follow the handbook to avoid engine issues. Most modern petrol cars are fine on standard unleaded, but some performance engines require higher octane to run as designed.

If budgeting is tight, consider how fuel fits into your wider monthly costs. Kandoo is a UK-based retail finance broker that can help you explore responsible finance options for car repairs, servicing or even a vehicle upgrade where appropriate. We focus on clarity of repayments so you can plan with confidence. Using credit for everyday fuel is rarely wise, but financing essential maintenance that improves reliability and efficiency can be sensible if it lowers long-term costs and fits your budget.

Simple steps to start saving today

1. Open a trusted Fuel Finder app or website.

2. Enter your location or allow location services.

3. Sort by price and distance together.

4. Check fuel grade matches your vehicle.

5. Confirm the timestamp of the last update.

6. Plan a short detour if savings justify it.

7. Fill up and keep your receipt.

8. Track your MPG to see the benefit.

Weighing it up at a glance

What to consider before you set off

Plan your route with live prices but remember that time has a value. A five-mile detour for a 1p saving rarely pays once you factor in extra driving. Prioritise stations that are slightly off your usual route if they offer a clear per-litre advantage and safe access. Keep an eye on currency and oil headlines - a weaker pound or supply disruption can shift wholesale costs quickly, and retailers may respond at different speeds.

If you run a tight monthly budget, build a small buffer for price bumps so you are not forced to fill at the most expensive moment. Keep your car maintained - tyres at the correct pressure, regular servicing and aligned wheels protect your MPG. Avoid premium fuel unless your handbook requires it, and do not let loyalty schemes steer you away from cheaper nearby options.

Alternatives worth a look

1. Car share or ride with colleagues a few days each week.

2. Use public transport for predictable commutes where practical.

3. Switch to a more efficient vehicle when it makes financial sense.

4. Consider a home or workplace EV charger if shifting to electric.

5. Explore telematics insurance that rewards lower mileage and smoother driving.

Frequently asked questions

Q: Why did prices fall in January 2026? A: Softer global oil prices, improving supply and competitive pressure helped pull average petrol to 131.91p per litre - the lowest since mid-2021.

Q: Will Fuel Finder really save me money? A: Yes, by exposing cheaper forecourts nearby. Supermarkets were already undercutting by around 3p per litre in late 2025, and live data should intensify competition.

Q: Why do prices rise even when oil seems steady? A: A weaker pound can lift import costs because fuel is traded in US dollars. Currency moves of 3-5% can show up quickly at the pump.

Q: Should I buy premium petrol? A: Only if your car requires higher octane. Otherwise, standard unleaded is fine and cheaper. Check your owner’s handbook for the correct grade.

Q: Is it worth driving further for cheaper fuel? A: Usually only if the saving outweighs the extra distance and time. A short, planned detour can pay - long detours rarely do.

Q: Are lower prices here to stay? A: The outlook is cautiously positive, but geopolitics and seasonal demand can reverse gains. Keep checking prices and plan for occasional spikes.

How Kandoo can help

Kandoo is a UK-based retail finance broker. If essential car repairs, servicing or an upgrade would improve reliability and fuel efficiency, we can help you explore suitable finance options with clear terms and predictable repayments. Apply online, compare offers, and choose what fits your budget with confidence.

Important information

This guide is for information only and is not financial advice. Fuel prices and availability can change rapidly. Always follow your vehicle manufacturer’s recommendations and check live prices before travelling. If considering credit, ensure repayments are affordable and sustainable for your circumstances.