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Asda fuel cuts may spark price war

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Motorists looking to supplement cheap car insurance premiums with value petrol will be encouraged to hear supermarket Asda is cutting prices at its pumps.

From Friday, Asda will reduce petrol prices by 2p to 115.9p a litre and drop diesel by 1p to 118.9p a litre, potentially sparking a price war.

The news will provide some relief to drivers after the AA reported UK petrol prices had stabilised for the first time since late February, following an all-time record of 121.61p a litre last week.

Asda commercial director David Miles said: "Yet again, Asda is leading UK fuel prices down. Motorists will be relieved commodity prices are coming down and as always we are the first to reflect falling costs in our prices at the pump."

The UK price of petrol dipped to 121.54p a litre on Monday, while the average diesel price is now 122.94p a litre.

But the AA said UK fuel prices should have gone down by more, as the wholesale price of petrol in north-west European had fallen of late.

AA president Edmund King added: "The failure so far to pass on wholesale petrol price cuts is leaving hard-pressed drivers feeling short-changed at the pumps.

"Fuel is an unavoidable and essential purchase for drivers and many would prefer to see pump prices come down instead of having to go to the next town for cheaper prices or having to qualify for savings, such as spending £50 in store first."

© Press Association 2010