Sainsbury’s announce fuel price cut

• Sainsbury’s announce drop in fuel prices

• Petrol costs will be reduced by 4p a litre, and diesel by 3p a litre

• The move, which will affect 279 forecourts, has been welcomed by the Automobile Assocation

• Tesco to cut 3p from petrol and diesel in reponse

Sainsbury’s moved first, announcing 4p off petrol and 3p off diesel.

Asda - traditionally the cheapest - responded by taking 3p off petrol and 2p off diesel. It said drivers would pay no more than 134.7p a litre for petrol and 141.7p for diesel.

Hours later, Tesco said it would cut 3p off both petrol and diesel, then Morrisons announced a 2p cut from both fuels.

The Sainsbury’s move was welcomed by the Automobile Association, Britain’s largest motoring group.

Spokesman Paul Watters said: “This is a substantial fall, worth £2 a tank of petrol, and fairly reflects the drop in wholesale costs which started in late February.

“However, many non-supermarket fuel stations started undercutting supermarket prices a fortnight ago.

“Drivers will very much welcome Sainsbury’s move, which gives respite after the third 8p-or-more pump price surge in the past 12 months.”

Sainsbury’s head of fuel Richard Crampton said: “We know that fuel is a big part of many customers’ weekly budget so we’re keen to do anything we can to help.”

Andy Peake, Asda’s petrol trading director, said: “We always aim to be the first retailer in each part of the country to drop prices when costs are falling and the last to put them up.

“When we do drop prices, we drop them everywhere, setting a maximum national price cap for our customer, which means they all benefit from our low prices, regardless of where they live.”

Peter Cattell, Tesco’s petrol category director, said: “As Britain’s biggest petrol retailer with 496 forecourts, more motorists make savings at Tesco pumps than at any other fuel retailer.

“This move is just one of the ways we are offering our customers an extra helping hand.”