Average petrol prices have fallen by 5.48 pence a litre since mid-September, the biggest monthly fall since the credit crunch began.
The fall means that monthly petrol bills are £10 a month less, and £2.8 million a day is being pumped back into non-fuel consumer spending.
In the past month, the average pump price of petrol has fallen from 137.64p a litre to 132.16p, while diesel has dropped from 142.50p a litre to 139.12p.
The AA’s president Edmund King said: “A more than £2.50-a-tank cut in petrol costs for families is a dramatic improvement on its own. But, heading into winter with cars using more fuel, the timing couldn’t be better.
“Alongside Asda and Sainsbury’s decision to fully reflect the fall in wholesale prices has been a huge benefit for drivers and businesses. However, the AA is also encouraged by the growing band of non-supermarket retailers challenging the pricing of other supermarkets whose prices in many places are far less generous.
“The bigger picture, with the future of refineries in the British Isles under threat, is more worrying and the AA urges the Government to find ways to support them.
“Last year’s bitter experience of speculator-inflated pump prices, fuelled by refinery closures, should be warning enough – even before considering the loss of UK manufacturing jobs.”