A survey has found that the average cost of a litre of petrol is 132.9c - the lowest level since August 2017.
The AA's monthly fuel prices guide has found that diesel is currently costing an average of 127.9c per litre, the lowest price recorded by the AA since April of last year.
It said the drop in crude oil prices is the main driver behind the drop in fuel costs.
Having floated between US$75 and US$85 (€74) per barrel for much of 2018, crude oil has largely remained at a cost of between US$55 (€47.9) and US$65 (€56) since December.
However, the AA has said that the "excessive tax" placed on both petrol and diesel means motorists are still paying more than they should be for their fuel.
It has estimated that 64.42% of the cost of each litre of petrol sold in Ireland is made up of various taxes.
While 57.71% of diesel's pump price comes from Government taxation.
Source: AA Ireland
The AA's director of consumer affairs is Conor Faughnan: "2018 felt like a year of unrelenting surges when it came to pump prices, so it's certainly reassuring for motorists to see prices trending in the opposite direction to start the New Year.
"However it's important to remember that we are not seeing this drop as the result of an act of kindness from government or an easing of taxes, but as a result of international factors which are always vulnerable to reversing in the opposite direction at any instance."
"As with any purchase, the most important thing for those who are trying to cut costs at this time of year is to shop around when buying petrol or diesel.
"Simply put, it's always better to be loyal to your own pocket instead of being loyal to any particular garage."
"For many people in Ireland, particularly those living in rural areas, the car is their only means of reliable transport and as a result crucial to their ability to get to work and continue to contribute to the Irish economy.
"The current levels of taxation only serve to punish these people for the failure of the current governments and their predecessors to improve public transport options across the country", he added.
"At the very least, if government persists on maintaining such a high level of taxation, then that money needs to be used wisely and invested in providing people across Ireland with reliable public transport options so that they have legitimate alternatives as opposed to simply forcing them into a corner and punishing them when they try to escape by their sole reliable transport option."
