THE AVERAGE PETROL PRICE dropped last week by 0.3 cents to 125.6 cents a litre, and, according to Commonwealth Securities economist Savanth Sebastian, prices may continue to fall.

The cost of unleaded fuel varied significantly last week however, with motorists in Western Australia paying 1.5 cents a litre less than the previous week, while Queensland drivers - where the State Government recently ended its 8 cents-a-litre fuel subsidy - paid 2.8 cents a litre more.

Sydney motorists last week saw the price of unleaded fall 3.9 cents to 120.4 cents a litre, the biggest drop across the country.

“Petrol prices have well and truly peaked and motorists should be reaping substantial saving over the next fortnight,” Mr Sebastian commented.

“The Singapore oil price has fallen by over 10 per cent in the last month, a fact that will be reflected fully in domestic pump prices over coming weeks.”

Mr Sebastian said that despite the fall in the Australian dollar, CommSec expects petrol prices to fall by five to seven percent a litre in the next fortnight.