Petrol prices at three-year low says AA

Petrol prices have fallen to their lowest in three years with the cheapest fuel sold in Yorkshire and the Humber, says the Automobile Association.

The AA said prices averaged 129.46p a litre in mid March, compared with a year ago when the average was 138.42p a litre.

It said that recent wholesale cuts suggested there could be another fall of up to 2p shortly.

Diesel prices averaged 136.59p a litre, their lowest since July 2012.

This week, the Chancellor, George Osborne, unveiled another fuel duty freeze in his annual Budget.

According to the AA, 11 EU countries have increased or will increase fuel duty this year, including France, Holland, Italy and Sweden.

Northern Ireland was the most expensive area in the UK for petrol, although its average price has fallen below 130p a litre.

London and the West Midlands are the cheapest areas for diesel at 136.3p a litre. Scotland is most expensive at 137.3p.

'Dark cloud'

As well as the fall in fuel prices, the AA said there had been a small rise in the number of petrol stations in the UK after years of declining availability.

But the AA said the news was tempered by data showing that real incomes had slipped to 2002 levels, after adjusting for inflation.

It said a recent Office for National Statistics report said inflation had turned an average 2%-a-year increase in earnings into an effective 8% fall between 2009 and 2013.

The organisation's president, Edmund King, said: "Appalling weather up until 10 days ago will have reduced car use and fuel consumption.

"However, official figures on inflation-hit earnings reveal a more persistent dark cloud hanging over the ability of UK drivers to use their cars. This is clearly making business difficult for fuel retailers too."