Petrol prices cut after price of oil drops
Supermarkets are now charging around 90p for a litre of unleaded. Prices now stand almost 25% lower than in June, when many stations were charging £1.10 per litre, a £11 reduction in the price of a typical fill-up.
Morrisons cut the price of a litre of unleaded by 3p to 89.9p at all its 287 UK petrol stations - the lowest price since last April. They have also cut the price of diesel to 105.9p.
Tesco responded by promising to match Morrisons in areas where both companies have stores and to keep its diesel at 105.9p, while Total also cut its unleaded price to 89.9p.
Earlier this week Tesco, Asda, Sainsbury's and BP cut unleaded prices nationwide to 90.9p per litre, and all are under pressure to match the new low to prevent customers deserting their stores.
The retailers' move came after the price of oil dropped below $50 a barrel to its lowest level for more than 3 and a half years. The price of Brent crude has fallen since July, when it peaked at $147.
Luke Bosdet, spokesman for the AA, said: "They know that consumers are under the cosh this Christmas, and it's a desperate attempt to get them through the aisles and spending on other things to keep profits up."
Mr Bosdet said he predicted further price cuts as Christmas grew closer.
He said: "When oil was this cheap in 2005, petrol was about 82p per litre. Since then, the Government has increased its take from every litre from 47p to more than 53p. Very soon there will be no possible further fall in petrol prices. Companies can't simply commit commercial suicide.
"We have the pre-Budget report on Monday, and all the talk is about tax cuts. The Government has repeatedly told the petrol companies to cut their prices, and now they have done, should be reminded how much of the price at the pump goes in tax. There's Government fat there and it needs to be cut down."
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