Petrol prices could fall to 99p per litre, the RAC says, falling below the £1 mark for the first time in more than five years.

Last week Goldman Sachs predicted that petrol prices would settle at just above £1 a litre if the slump in the oil market continued. Since then, the cost of oil has dropped further - from $66 a barrel to $59 a barrel - and Opec has indicated that it would not intervene to prop up prices even if they fell to $40 a barrell.

Brent crude, the oil industry benchmark, is now worth little more than half its $115-a-barrel peak in June. RBS warned that "a perfect storm of falling demand and rising supply" could push Brent crude down to $42 a barrel.

The average price for a litre of unleaded petrol is currently £1.17, but an RAC spokesman said he expected costs to fall to £1.10 a litre within a fortnight, and to pass through the psychologically significant £1 barrier in the first few months of 2015.

"What's currently happening at the pumps with falling fuel prices is something many motorists will not remember seeing before," he said, praising petrol retailers for passing on their savings.

Speaking to a Treasury select committee last week, Kevin Daly, senior economist at Goldman Sachs, said that warnings of global economic instability caused by plunging oil prices would go unheeded by the majority of the population.

"My own view is that people respond more to the pounds and pence in their pockets than warnings by politicians of dangers lurking abroad," he told MPs.