Fuel prices vary by 6p from town to town

Variations in fuel prices from town to town have increased from 2p to 6p, while some supermarkets have been slow to pass on the full reduction in wholesale fuel prices, according to the AA's latest report on fuel prices.

The report revealed that average petrol prices have dropped from an all-time high of 121.61p a litre in May to 118.08p for petrol, while diesel has dropped from 123.08p a litre to 120.52p.

However, prices in large areas of the South, South East, home counties and rural Midlands have fallen by less, and are still above the 2008 peak of 119.7p.

The difference in price from town to town is now as much as 6p per litre, or 3 for a full tank of fuel.

Drivers in Bracknell and Newbury, for instance, have been paying 119.9p on average, but fuel is available in nearby Reading for 113.9p. It's the same story in Folkestone, Dover and Ramsgate, where prices are 6p more expensive than in Canterbury, where the average is 113.9p.

The AA also says a supermarket price war in May didnt result in all retailers cutting prices by as much as they could have.

'The wholesale petrol price tumbled from around 40p a litre in early May to around 36p by the 24th, said AA president Edmund King.

'Although Asda and Morrisons largely passed on the entire saving, other supermarkets have been much more selective as to which customers are enjoying the full respite from record high prices.'

With oil prices now back above $75 a barrel, the AA is predicting increases in prices in the months to come.

How to save fuel and find cheaper pumps
We've got plenty of tips on how to use less fuel.

You can also search for the lowest pump prices in your area with sites such as Petrolprices.com.