Supermarket pledges petrol price cut

A leading supermarket today stoked up the petrol price war on the day oil prices slipped below $60 a barrel.

The benchmark oil price in New York was trading near $59.80 a barrel while in London the price of Brent crude dropped to $59.37 – the lowest levels since March.

The falls, which reflected improved supply and easing global tensions, could provide another shot in the arm for motorists who saw petrol fall to an average 89.28p a litre on Friday.

Tesco pledged to cut prices by up to 2p today as it continued to compete with Asda and other supermarkets.

Oil prices hit record highs of more than 75 US dollars in July prompted by growing tensions in big oil producing nations such as Iran and Nigeria.

Fears of hurricane damage to US Gulf coast refineries also drove the market higher in the summer, as well as the conflict between Lebanon and Israel.

However, growing crude oil inventories coupled with easing worries over the hurricane season and no apparent supply disruptions have sparked price falls.

The latest US Energy Department data showed crude oil inventories declined by 2.8 million barrels last week to 324.9 million barrels.

However, that is still 5% more than last year and well above the five-year average for this time of year, and it is hoped the supply will continue to ease pump prices.

The AA Motoring Trust said that in the last month, petrol prices have seen their biggest dip since it started monitoring prices 18 years ago.

The average price of petrol at UK filling stations fell to 89.28p a litre on Friday from 98.2p in mid-August, although Asda cut prices to 85.9p last week.

Diesel stood at 94.35p a litre compared with 99.5p in mid-August.

Trust spokesman Luke Bosdet suggested motorists could still experience an easing in prices at the pumps.

He said: “It usually takes around four to six weeks for the price of crude oil to filter through to the pumps.

“However, supermarkets have been speculating on how much the wholesale price of petrol may fall and setting their prices accordingly.

“As there is a price war going on, they may try and get ahead of the game and bring down their prices further.”

Unlike Asda, Tesco said it was not introducing a flat rate across the country. The company also said it would not speculate on any possible cuts in the future.