Petrol price slashed by 5p in supermarket war

Britain's biggest supermarket is to slash petrol prices by up to 5p a litre.

Tesco said it would join a price war started by rivals Asda and Morrisons by matching the lowest price near their supermarket outlets.

The move will finally bring some relief to hard-pressed motorists.

All four of the biggest supermarkets took between 3p and 5p off the price of a litre of petrol and diesel today.

A spokesman for Tesco said: "We will come down by similar amounts. We price-match in geographical locations, so if a rival's prices are going down, then we will go down as well."

Supermarket chain Asda announced it would cut the cost of unleaded and diesel by 3p a litre, and Morrisons swiftly followed suit by dropping the price of unleaded and diesel by 4p a litre. Sainsbury's said it was cutting petrol by 5p a litre from Thursday for customers who spent £50 or more in stores. The promotion will run for two weeks.

Asda and Morrisons said they were responding to a drop in the price of oil - down from $147 to $130.

Asda said all 170 of its petrol forecourts across the country would sell unleaded petrol for 113.9p a litre and diesel for 128.9p a litre from today.

The supermarket's trading director, David Miles, said: "We are seeing a more stable reduction in oil prices, allowing us to pass on the savings to customers.

"We urge other retailers to follow our lead at a time when customers need as much help as possible."

Morrisons later said it had cut the cost of unleaded and diesel by 4p a litre at all of its 285 forecourts across the UK, a move that came into effect at 6pm yesterday.

Morrisons group store operations director, Mark Gunter, said: "The cost of crude oil and refined product has fallen in the last few days and we are ensuring our customers reap the benefit by passing on the saving quickly, for cheaper prices at the pumps."

A spokeswoman for Sainsbury's said: "From Thursday our customers can reap an even bigger reward because we are running a 5p-off-per-litre promotion when they spend £50 or more in-store plus they will also earn Nectar points."

AA president Edmund King said: "Asda's petrol price drop is excellent news for UK motorists and we urge other fuel retailers to reduce their prices - and not only where they find themselves neighbouring an Asda petrol station.

"We have seen two drops in European wholesale fuel prices so far this summer with the UK motorist seeing next to no benefit.

"Since mid-July the wholesale price of gasoline has fallen six per cent and the AA expects fuel suppliers to pass on - not pocket - the saving for the good of UK families, hauliers and the economy."

Mr King added: "We will watch price movements like a hawk, and should fuel suppliers and retailers appear to be dragging their feet we will seek to expose this."