UK supermarkets start fuel price war

Three of Britain's major supermarkets began a petrol price war yesterday, cutting fuel prices by up to five pence a litre and offering some relief for hard-pressed motorists.

After months of soaring prices, Asda said unleaded petrol would fall by three pence to 113.9 pence a litre at its 170 forecourts. The diesel price will fall to 128.9 pence.

Morrisons said it would cut petrol and diesel prices by four pence a litre, while Sainsbury's said customers who spend £50 or more in-store would get a five pence a litre discount on fuel during a promotion starting tomorrow.

Asda's trading director David Miles said the cuts were in response to the recent drop in the price of oil.

"We are seeing a more stable reduction in oil prices allowing us to pass on the savings to customers," he said in a statement. "We urge other retailers to follow our lead at a time when customers need as much help as possible."

Surging demand from emerging economies in Asia has helped drive a six-fold rise in oil prices since 2002, but concerns over flagging demand in the United States and other large consumers have cut prices in recent days.

The average price of a litre of petrol in Britain in July was 119.5 pence, compared to 104.3 pence in January, according to the AA motoring organisation.

"We are ensuring our customers reap the benefit by passing on the saving quickly, for cheaper prices at the pumps," said Mark Gunter, group store operations director.