Petrol firms braced for new price war

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The Independent Online

Petrol companies were yesterday braced for a price war following a decision by Esso, the UK's biggest supplier, to cut prices in two regions.

The company is promising to match the cheapest prices in North-east England and Scotland as part of a customer research programme. Prices have dropped by as much as 5p a litre.

Esso's "Price Watch" scheme, running in the Tyne-Tees and central Scotland areas, is intended to establish whether customers are more attracted by price, promotions, or convenience. The company believes that while location plays a large part, people are willing to travel further for cheaper petrol.

In the Tyne-Tees area, Esso says its filling stations will match the lowest price within a two-mile radius, but gift vouchers have been withdrawn. Before the scheme began, prices ranged from 52.9p to 56.9p a litre. The range is now 48.8p to 54.9p.

Claims that the move could trigger a new price war were downplayed by other suppliers. Shell and BP said they already altered prices from area to area to match the lowest prices. "We change prices every day, and respond immediately," said a spokesman for Shell.