Supermarkets slash petrol prices

PETROL prices are set to fall after supermarkets cut costs today. Asda kicked off the price war by announcing that prices 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. Sainsbury's could also be forced to follow or lose customers.

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.'

The supermarkets group has ended a scheme which rewarded shoppers with Asda vouchers for filling up with petrol. The company said it had been replaced by cheaper petrol for everybody. Tesco said: 'We won't be beaten on price and will immediately cut prices at our forecourts within a three-mile radius of Asda.'

In recent weeks the price of petrol has crept up after Saddam Hussein blocked exports of Iraqi oil to the West. There were fears that petrol prices could hit the psychological barrier of 80p a litre, which sparked the fuel protests in September 2000.

Tony Vickers of the Association of British Drivers said motorists would be delighted by the news. They will be very pleased that prices are being pushed down after they have been creeping up for so long. It is very notable that petrol prices came down when supermarkets entered the market and there has been rapid response by supermarkets to consumer needs.'