Price war at petrol pumps

A PETROL price war erupted today after supermarket giant Asda pledged to keep unleaded below 80p a litre despite record rises in the cost of oil.

The move piled pressure on rival retailers to follow suit despite Brent crude leaping 35 cents to $40.99 a barrel, just above the $40.95 previous record set in the 1990 Gulf War. US crude hit an all-time peak of $44.28.

Asda insisted unleaded would remain below 80p 'for the foreseeable future' at its 150 stations. A spokesman said: 'We have a commitment to Britain's motorists that we will be the last to raise prices and the first to drop them.'

Rival Sainsbury's immediately announced that its prices would also remain below 80p, saying: 'Our average price is 79.3p per litre - our aim is to be the cheapest in any given area. We have a policy to be the lowest.'

Safeway also said it would peg unleaded below 80p. 'It is below 80p at all of our 284 stations now and we have no plans to increase in the near future,' said a spokesman. And Tesco joined the fray, saying: 'We will not be beaten at any location. We will always have the cheapest fuel in any given locality.'

However, motoring organisations said average petrol prices had risen since the weekend and warned that prices above 80p would become the norm throughout the summer.

At 1,200 Shell garages, unleaded was today between 80p and 81p per litre. BP said the average price of unleaded at its 1,400 sites today stood at 82p. 'This is very good news for motorists,' said Rebecca Rees of the AA. 'It just shows the value to the motorist of shopping around before they fill up.'

In recent weeks the average national price of petrol has risen from 79p per litre to 82p, making unleaded the same price as diesel. The latest oil price surge follows terror warnings from the US Government, a cut in supplies from Russia and attacks on an Iraqi pipeline.

Purnomo Yusgiantoro, president of the oil-producing cartel Opec, said member states were already at maximum output and there was little they could do to calm the markets.

In Russia, Yukos is embroiled in a power struggle with President Putin over unpaid taxes. The oil giant pumps one-fifth of crude in Russia, the world's second-largest oil exporter after Saudi Arabia.