The average price of UK petrol has dropped below £1.20 a litre, its lowest level since December 2010, according to government figures.
Oil has fallen from about $115 (£72) per barrel in June to about $65 per barrel, a decline of almost a half.
In comparison, petrol prices in the UK have fallen from a high of about 131.11p per litre in the summer to 119.83p - a decline of about 9%.
Diesel dropped from 136.22p to 124.79p.
Campaigners argue that taxes account for the bulk of UK pump prices, so the government has more power to reduce prices than petrol companies.
According to an analysis by the AA, about two-thirds of the average price paid for a litre of petrol is accounted for by a combination of Value Added Tax (VAT), at 20%, and fuel duty, at 57.95p.
The move has triggered the big supermarkets to reduce petrol prices on the forecourt. Asda, Sainsbury's, Morrisons and Tesco have all lowered their prices.
"We are hopeful motorists will see average petrol prices under 112p a litre, something they will not have seen since February 2010," said RAC spokesman Simon Williams.
"If this happens the cheapest retailers will no doubt be selling petrol for well under 110p a litre, perhaps even lower," he added.
The price of oil has been falling since June, triggered by an oversupply on the market, as demand weakens.
On Wednesday Brent crude hit another five-year low, falling 4% to $61.23, the lowest level since July 2009, before recovering slightly.
That followed the US Energy Department reporting a surprise increase in supplies, as well as the oil cartel OPEC predicting that demand for crude would fall to 28.9 million barrels a day in 2015, 400,000 barrels a day less than in 2014.