Motorists are in for some pre-Christmas relief as petrol prices fall to a five-month low.

The average price of 91 octane has fallen about five per cent since December 1 to $2.77 a litre, according to fuel price monitoring app Gaspy.

The fall will be welcome news for motorists, who had been warned 91 octane could hit an average of $3.50 per litre by Christmas.

AA principal policy adviser for motoring affairs, Terry Collins, says prices are likely to continue to fall into January.

Terry says increased oil production in the US and a stronger New Zealand dollar are contributing to lower prices at the pump.

According to the US Energy Information Administration, US crude and condensate production increased by 224,000 to 13.24 million barrels a day in September.

The increased availability is leading to softer prices, with Brent Crude down from US$81 a barrel last Friday to US$77 on Wednesday.

Meanwhile, the New Zealand dollar last traded at US61.2c, up from US58c at the end of October. Because oil is traded in US dollars, a stronger New Zealand dollar means better petrol prices.

Although retail prices are likely to continue their downward trend into the new year, it's difficult to predict what they might do beyond January, says Terry.

-Esther Taunton/Stuff.