Price war as Morrisons cuts 2p off litre of petrol

The start of another round in the fuel price war was signalled today as Morrisons cut 2p off the price of a litre of diesel and unleaded.

Britain's fourth-biggest supermarket brought in the reduction at 6am today, making the national average at its 285 forecourts 109.9p per litre for unleaded and 121.2p for diesel. Asda responded by saying it would drop prices to 109.9p per litre for unleaded and 121.9p for diesel nationally from tomorrow morning.

Tesco today pledged it would match the lowest petrol price in the local area at all its forecourts. Morrisons' move follows a round of cuts last month by the big four supermarkets.

Oil prices have dipped nearly $30 a barrel in the past month amid mounting concern that slower economic growth is reducing global demand.

Morrisons estimated its customers would pay up to £5 less for a full tank of fuel than three weeks ago.

The price cut comes days after a survey revealed British drivers were paying more for fuel than those in other major European countries. When Britons were paying 119p a litre for petrol last month, Spanish drivers were being charged 96p.

Petrol and diesel were also cheaper in Germany, France and Italy.