Supermarkets join petrol war

A new petrol price war was raging last night with the supermarket chains Sainsbury and Tesco both promising unleaded fuel for under 50p a litre.

And the oil giant Esso, which fired the first volleys in the campaign last month, stoked the fires by pledging that it would not be undercut.

Esso has launched "Pricewatch" promotions in the north- east of England and central Scotland where it says it will match any rival prices.

The company said that the schemes could be extended nationally if they proved successful.

Sainsbury's responded on Thursday by saying its maximum price for unleaded would be 49.9p.

Within hours of the announcement, Tesco said it would fight back by matching its rival's offer.

"You won't find cheaper petrol anywhere in your local area," Tesco petrol buyer Jason Tarry said. "If another retailer cuts their price we will match it, and that's a promise to all our customers."

Esso said it would watch Sainsbury and Tesco closely, but it believed that in the long term it would still be offering the best service.

"While the Sainsbury's move is interesting, it would seem to be linked to a short-term promotion," Esso said.

"The results of our research will ensure that Esso gives the motorist more than just short-term promotions but the right mix of quality products."

Shell said it was already selling unleaded at much less than 50p a litre in several areas.

The company said that Sainsbury's claims were a publicity exercise.