Tesco cuts petrol by 3p as PM says prices must fall

Tesco slashed the price of petrol by 3p at all 430 of its forecourts this morning.

The rare piece of good news for consumers comes after weeks of falling world oil prices. It will save around £1.50 for a driver filling up a typical family car.

The supermarket giant said all grades of fuel, including diesel, would get the 3p cut, which is likely to be copied by rivals Asda and Morrison.
The Prime Minister warned energy giants today that they must cut fuel prices and gas and electricity bills.

Tesco commercial director Richard Brasher said: "We know customers are feeling the pinch, but we are working harder than ever to cut the cost of living."

Oil prices fell again to their lowest level for a year. A barrel of crude was today trading at $82, more than 40 per cent lower than the $147 high in July. Oil prices have been falling on fears that global recession will mean lower demand.

The average price of unleaded petrol prices across Britain yesterday was 109.2p a litre, with diesel costing 120.6p, according to the AA.

Petrol now costs nine per cent less than the high of 119.9p on 17 July, with diesel prices nearly ten per cent cheaper.

The Petrol Retailers Association said oil price changes typically take between six and eight weeks to filter down to forecourts.

AA spokesman Luke Bosdet said: "It's good to see that somebody other than Morrisons and Asda is taking the lead in dropping prices."

Gordon Brown today warned energy companies they must not drag their feet in lowering prices as the cost of oil falls. He also told leading oil-producing nations not to cut production.

At an energy meeting in Swindon, Mr Brown stressed that the price of oil had halved since the summer. "We are determined that when that happens that fall is also passed on to the petrol pump and passed on to people who have got gas and electricity bills," he said.

"We are determined that just as people act quickly to pass on the rise when the oil price rises, they pass on the fall when the oil price falls."

He also emphasised the need to restore stability in the oil market. "I'm talking to the leaders of OPEC, who really are responsible for setting the oil price, to tell them that they must not, as some of them are planning to do, cut oil production now so that the price would go up again."

Mr Brown also sought to claim some credit for the lower oil prices. "Because of some of the things that we have done, it's now down," he said.