Supermarkets slash petrol prices with more cuts predicted due to falling oil

The price of fuel could drop below the £1 a litre mark as supermarkets prepare for battle in what is set to become another petrol price war.

After Asda announced it was cutting unleaded petrol by 2ppl today (August 21), Tesco rapidly responded with a cut with effect from 1pm and Sainsbury’s said it would be implementing its 2ppl cut from tomorrow.

The supermarket announces the drop on the back of a rewarding month for motorists and those filling up their tanks.

Diesel drivers have already seen prices fall over the last few weeks, as sellers finally pass on falls in the wholesale price to customers.

Asda led the way by reducing the price of petrol from 111.7p per litre to 109.7p per litre, meaning that it has trimmed 9p per litre off diesel and 5p per litre off petrol in the past month.

The government had in four instalments raised excise duty on petrol and diesel between November and January to take away the reduction in retail rates that was warranted from falling worldwide oil prices.

“This summer has been a much cheaper one for motorists than the last”.

RAC spokesman Rod Dennis said: ‘Fuel is a major expense for millions of families in the UK, and these latest cuts are certainly helping to ease that burden’. In the past year, taking advantage of the lower crude oil prices, the government had raised excise duty on petrol and diesel between November and January in four installments totalled Rs 7.75 per litre on petrol and Rs 6.50 a litre on diesel.

Steve Gooding, director of the RAC Foundation, welcomed the news, adding that with oil trading at the same price as it was in January, more cuts could be expected.

Worldwide oil prices slid to a fresh six and a half year low in Asia on Thursday, approaching the key $40 a barrel level after a surprise rise in US inventories added to concerns of a supply glut.

It is welcome news that all motorists are now benefiting from the plummeting price of oil.