Stores cut cost of petrol

Petrol prices are set to fall after supermarkets today cut costs at their forecourts.

Asda kicked off the price war by announcing that its fuel would drop by 1.2p a litre.

Within minutes, Tesco joined the fight, pledging to match the cuts. It has a guarantee to match the price of garages within a three-mile radius of its stores.

Petrol on these Asda and Tesco forecourts will now cost between 71.7p and 73.6p per litre.

Both Sainsbury's and Safeway said they were considering lowering prices and admitted the news had taken them by surprise.

Esso said it was monitoring local prices and would adjust them to remain one of the cheapest petrol suppliers in all areas.

Supermarkets have been using petrol prices as one of the main tools in their war for customers. The profit margins on their forecourts are thought to be among the lowest.

The stores believe that customers attracted by cheap petrol are also likely to do their weekly shop in the supermarket at the same time as they fill up their cars. Tony Page, the non-food business director for Asda, said: "This is just the beginning - our aim is to offer the best value fuel wherever shoppers live."

Tesco said: "We won't be beaten on price and will immediately cut prices at our forecourts within a three-mile radius of Asda."

The price of petrol has been creeping up in recent weeks after Saddam Hussein blocked exports of Iraqi oil to the West.

? Thousands of drivers faced serious delays on the A4 out of London today after motorists were stopped for a survey commissioned by the Mayor's Transport for London office - into how to improve travel.