Cuts spark price war at pumps

Supermarket Tesco cut its fuel prices today following a big fall in the cost of oil internationally (Getty Images)

Hard-pressed motorists received some cheer today when supermarkets announced fuel price cuts.

Tesco led the way by saying it had, from today, slashed 3p a litre off the cost of its petrol and diesel.

Later Sainsbury's and Asda said they would be introducing 3p-a-litre reductions on petrol and diesel from tomorrow.

The supermarkets were responding to the big fall in the cost of oil internationally sparked by the opening of emergency reserves by the International Energy Agency.

The cuts were welcomed by the AA and the RAC and hopes were expressed that there would be reductions at the pumps.

Tesco said that it had wanted to pass on the benefit of a fall in oil prices to customers straight away.

Asda said its reduction would mean none of its customers would pay more than 130.7p a litre for petrol or more than 134.7p a litre for diesel.

AA president Edmund King said: "We welcome this rapid 3p reduction in fuel prices and hope that other retailers will follow this lead.

"Earlier this week the AA revealed that high fuel prices are now affecting a record three-quarters of drivers who are having to cut back on journeys, cut back on other expenditure, or cut back on both.

"Reduced fuel prices will help the general economy to recover, as lower prices at the pumps means more spending elsewhere."

RAC motoring strategist, Adrian Tink, said: "This looks like it's the start of price war at the pumps which can only be good news for motorists.

"Our motoring report this week showed the detrimental impact high fuel prices are having on family life with people having to cut back on visiting family, taxiing children and maintaining their social life.

"These cuts will certainly help those struggling but the price of fuel is still eating away into over-stretched family budgets."