Supermarket giant cuts petrol price

11:49am Wednesday 19th November 2008

Supermarket giant Asda has reignited the fuel price war by lowering its petrol prices to 90.9p per litre.

It is Asda's 10th consecutive cut since July and brings prices to their lowest level since April 2007. The price of diesel has been reduced to 105.9p per litre.

With the price of crude oil continuing to fall, other retailers will be under pressure to follow Asda's lead.

The price of a barrel has dropped to barely 50 US dollars (£33), from almost 150 US dollars (£100) in early July.

Asda trading director Darren Blackhurst said: "With oil prices still falling, there is no need for petrol prices to be so high - it is simply ripping off motorists."

The news comes as the AA revealed that the price of petrol has fallen by a record amount over the past month.

Average UK prices dropped from 106.4p a litre in mid-October to 94.86p a litre in mid-November.

Compared with mid-July, when petrol prices peaked at 119.7p a litre, a tank of petrol now costs £12.42 less.

Paul Watters, head of public affairs at the AA, welcomed the price cut, but expressed doubts over its viability in the long term.

He said: "It's very good for consumers - long may it continue. Clearly Asda's policy is to get people through the door of the supermarket. Other sellers will find it hard to compete with them. It proves the tenacity of the supermarkets to keep on discounting, but we don't know how sustainable this is. We hope it's not just a Christmas giveaway."