Tesco knocked 3p off the cost of a litre of petrol yesterday – the first shot in a supermarket price war following the surprise release of emergency oil stocks by the West's leading consumer nations.
The price cut at filling stations run by Britain's biggest retailer came after the International Energy Agency announced the release of 60 million barrels of government-held oil stocks over the next 30 days. It was only the third such release of supplies in the agency's 37-year history.
The decision depressed world oil prices, which slumped by 6 per cent in the hours after the move. At about $107 per barrel, yesterday's crude prices remained sharply below the levels seen before Thursday's announcement.
Richard Brasher, the chief executive of Tesco UK, said the 3p cut per litre of unleaded and diesel was in direct response to the IEA move. "We know our customers are feeling the pinch at the moment so we want to pass on the benefit of a fall in oil prices straight away," he said.
At Morrisons, petrol director Mark Todd said the group had also begun to cut fuel prices. "We started bringing our pump prices down [in the] morning and will have reduced our prices by up to 3p a litre on both unleaded and diesel from [Friday]," he said.
Sainsbury's was set to make similar cuts from midnight last night. Asda said that after its price reductions this morning, customers will pay no more than 130.7p per litre of unleaded and 134.7p per litre of diesel.
Fuel costs soared in recent months as oil prices rose because of the turmoil in the Middle East and North Africa. In the UK, the record was 137.43p per litre for petrol and 143.04p for diesel in early May, the AA reported.