The currency hit a fresh 37-year low after a raft of tax cutting measures were announced in Chancellor Kwasi Kwarteng’s mini Budget.
Petrol prices have fallen to their lowest levels since May 16 this week[/caption]
Fuel prices have fallen in recent weeks giving much-needed relief to motorists hit by the cost of living crisis.
Petrol prices fell below 166p a litre for the first time since May on Wednesday.
But the weak pound is adding almost a fiver more to each tank of fuel when filling up at the pumps, according to the AA.
The motoring group said the a tank would be 9p a litre cheaper if the pound were at its mid-February value against the US dollar – a saving of or £4.95.
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The pound was worth $1.35 against the dollar earlier this year, but has since plunged and hit $1.14 this week.
Luke Bosdet, the AA’s fuel price spokesman said: “The influence of the exchange rate is often overlooked when drivers compare oil price movements with those at the pump.”
“At the moment, it is critical. Oil and fuel on commodity markets are traded in dollars, which makes the weaker pound very bad news for motorists.”
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The price of petrol rocketed this year partly due to the war in Ukraine.
The highest average fuel prices for the year so far were recorded on July 4, when petrol was 191.6p per litre and diesel was 199.2p per litre.
Since then, the cost of filling up a typical 55-litre family petrol car has been cut by more than £14, while refuelling diesel models costs nearly £10 less.
At the start of the week, petrol averaged 164.78p a litre at the pump, down from 173.46p in August. Diesel has fallen over 3p a litre in the past month to 180.95p on Wednesday.
How can I cut fuel costs?
There are ways to save an extra 5p per litre if you sign up to a major supermarket loyalty schemes.
Esso has partnered with Nectar for its loyalty scheme and you can get 5p off a litre when you swap 300 Nectar points.
Drivers with a BPme rewards card will get one point for every £1 they spend in store or on a litre of regular fuel at a BP garage.
Motorists will get £1 off their fuel or shopping for every 200 points.
Texaco, Shell, Sainsbury’s and Tesco loyalty card holders can also get money off their bills.
You can also cut fuel costs by driving more efficiently. This can be achieved by:
- Accelerating gradually without over-revving
- Always driving on the highest possible gear
- Allowing your car to slow down naturally as your brake
There are also sites you can use to help you find the cheapest petrol prices near you, like PetrolPrices.com and Confused.com.
These allow you to search prices of UK petrol stations. All you need to do is enter in your postcode and tell it how far you want to travel (up to 20 miles).
It’s also so easy to forget about the clutter building up in your car – whether it’s tools, kids’ toys or general rubbish. But it turns out additional storage space can increase fuel costs by a whopping 12%.
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So, don’t forget to do a car clear out every now and then.
And, if you’re driving at a slower speed, think about taking the roof rack off and switching off air con to save on running costs.