Sainsbury’s and rival Asda will cut the price of diesel by up to 2p a litre and unleaded petrol by a penny from today.
Tesco, which is Britain’s biggest petrol retailer with about 500 petrol stations, will cut unleaded petrol by 1p per litre, with diesel reducing by at least 1p a litre although some sites will get a 2p a litre price cut.
The moves follow a decline in the price of Brent crude oil, which is now below 90 US dollars a barrel due to weaker global demand.
This means motorists are benefiting from some of the cheapest prices for over three years, although some of the benefit of Brent crude’s recent decline has been offset by a strengthening in the US dollar.
Supermarkets have been slashing forecourt prices as part of their wider effort to win back grocery customers from discount rivals Aldi and Lidl.
Asda, which has 232 forecourts, said its customers will pay no more than 126.7p a litre for diesel and 123.7p per litre for unleaded petrol.
The supermarket’s petrol trading director Andy Peake said: “We’re giving drivers the opportunity to fill up their cars with some of the cheapest fuel prices in the market for years.
“No matter where customers live they will benefit from the same fuel price with our national price cap.”
The AA said a typical 50 litre tank of unleaded petrol now costs around £2.50 less than it did a year ago and a 55 litre tank of diesel is around £4 cheaper.
AA president Edmund King said: “The main reasons for the drop in prices are global supply and demand, plus supermarket discounting in the UK. To put it crudely we are swimming in oil.
“US oil output has doubled in the last six years and is running at its highest production levels for a quarter of a century. However, global demand has declined particularly as the Asian economies cool down.
“In the UK the reductions we are seeing at the pumps have also been speeded up by competing supermarket offers of discounts. Drivers haven’t seen such prices since 2011 but oil prices are still volatile and more global unrest in oil producing countries can just as easily send the price spiralling again. Enjoy it while we can.”
Mr King said that although oil and wholesale fuel products are now cheaper than they have been for a long time the recent poorer pound to dollar exchange rate means forecourt prices are not as low as they could be.
He warned that OPEC members may cut back on supply to boost the oil price, while refineries have been cutting production to boost profit and limit the current fuel glut and winter heating oil demand may impact on the diesel price in the coming months.
Mr King said: “As always it’s a roller coaster for drivers. We should see some further reductions in prices at the pumps as long as the markets don’t turn quickly and fuel retailers grab extra profit.”