Motorists are in for some cheap fuel this Christmas after prices dropped another two cents this week.

All fuel grades have dropped, meaning both petrol and diesel have fallen by more than 20 cents a litre since October.

Fuel prices have dropped again for the 11th time since October.

Z service stations led the two cent drop on December 10 as commodity prices continued to fall.

This is despite the NZ dollar also dropping two cents in the past week, offsetting some of that fall in commodity prices, says the Automobile Association spokesperson Mark Stockdale.

The latest drop is the 11th price cut in a row.

Mark says: 'The last time diesel prices were this low was four years ago, and petrol process briefly fell to this level in June 2012.”

While oil prices are now down to US$67 a barrel, the commodity price for petrol is now around US$80 a barrel, and diesel is under US$90 a barrel, down over 35 per cent since June.

The commodity price makes up around 40 per cent of the retail price of petrol (and taxes 45 per cent).

'So this 35 per cent cut in commodity prices would only translate to about a 14 per cent cut in pump prices assuming the NZ$ is unchanged,” adds Mark.