PETROL will be cut tomorrow to 110.7p a litre by price leader Asda as the RAC forecast it could fall below £1 early next year.
The supermarket chain today announced its 11th petrol price cut in three months, which will lop off another 2p at the pumps.
The new maximum price at its 245 forecourts is 16p a litre less than at the end of September
Asda is also cutting a further 1p off diesel, which will fall to a maximum of 117.7p - 12p less than in September.
Petrol trading director Andy Peake said: “We know our competitors are likely to follow our lead.”
The move came as oil prices continued to plunge, with Brent crude trading at below $60 a barrel for the first time in nearly five and a half years.
The RAC said petrol was on course to dip below £1 a litre in the first few months of 2015 - a five year low.
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It said the average price of a litre of petrol is 116.9p - nearly 14p a litre cheaper than at the start of the year.
Diesel is nearly 16p cheaper - 122.33p a litre now compared to 138.24p in January. The average supermarket price of fuel is 114.26p a litre for petrol and 120.18p for diesel.
Fuel spokesman Simon Williams said: “What’s currently happening at the pumps with falling fuel prices is something many motorists will not remember seeing before.
“Talk of prices going up like a rocket and falling like a feather could not be further from the truth as retailers have been quick to pass on savings at the forecourt since we forecast on 6 December that prices were due to come down by 7p a litre for petrol and 6p for diesel.
“The cost of going to visit family and friends this Christmas will be the cheapest it’s been for nearly five years, but the prospect of petrol going below £1 a litre in the New Year is incredible, particularly when prices at the beginning of 2014 seemed to be heading ever upwards.
“Current forecasts are for average petrol prices to fall to below 110p a litre in the next fortnight and diesel to drop to under 116p.
“At these average prices across the country the cheapest retailers will almost certainly be selling petrol for around 105p a litre, or even lower.”
However, the AA, which also monitors fuel prices and issues detailed monthly reports, expressed caution.
President Edmund King said: “With duty on each litre of fuel at 57.95p and VAT around 20p, plus the pound at its lowest level against the dollar for three months, it would take another almighty drop in crude prices to reach £1 a litre at the pumps.
“Drivers would love to see £1 per litre, but a white Christmas might be a better bet at the moment.”
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