Cuts at the pump after oil price slumps

Recession

Three British retailers cut the price of petrol yesterday after fears of a global recession prompted by the terrorist strikes on America sent crude oil prices into free fall.

The oil giant BP reduced the price of a litre of unleaded petrol by 1p to a typical price of 76p per litre.

Britain's largest supermarket chain, Tesco, followed suit by shaving a penny off unleaded fuel, which from midnight last night cost 75p per litre. Sainsbury's will reduce the price of a litre of unleaded fuel by one penny to 74.9p sometime today.

Although the price of crude oil showed mild signs of recovery on world markets yesterday, other petrol companies – including Texaco, Esso and Shell – said they would consider cutting pump prices.

The price of crude oil rose after the 11 September attacks because traders feared the possible impact of US retaliation on the Middle East, the world's main source. But it has since fallen and on Monday the price of Brent crude fell by more than $4 per barrel to below $22 (£15), the lowest for 18 months. The falls have had a knock-on effect on the international petrol price, which has dropped by about 1.3p a litre since August.

A spokeswoman for BP said: "In response to the sustained drop in the international price of petrol, BP have reduced the price of ultra-low sulphur petrol by one pence per litre."

Shell said it was monitoring prices "very closely" in the light of BP's cut. A spokeswoman said: "We are monitoring prices very closely right across the network and will ensure that our prices remain competitive. If necessary, our prices will be adjusted to ensure they remain competitive."

Esso said that it was constantly monitoring forecourt prices and would ensure its prices remained "among the lowest locally".

A spokesman for Esso said the company's "typical average price for the UK is 76 pence per litre anyway" – the same price as BP petrol after its cut.

Texaco said its prices were "pretty competitive anyway" at 75.9p per litre and said it would continue reviewing prices as normal on a "site-by-site" basis.