Asda sparked a petrol price war as it announced it will cut the price of fuel by 3p per litre off the back of falling wholesale costs.
As Asda runs a national price cap across its 319 petrol stations, this means drivers will pay no more than 119.7p per litre on unleaded and 131.7p per litre on diesel as of today.

This is the third cut announced by the supermarket, having slashed 2p a litre on unleaded last week and 3p a litre on unleaded in October. In total, drivers have saved 8p per litre filling up at Asda.

Sainsbury’s was quick to follow Asda’s lead by announcing an up to 3p per litre price cut on petrol and diesel. However the reduced pump price will be available from Saturday. Customers will be able to collect Nectar points when filling up their cars, gaining one point per litre.

Morrisons also waded into the petrol price war, cutting up to 3p per litre off petrol and diesel at its 335 forecourts from tomorrow morning.

Data from RAC Fuel Watch reveals that wholesale petrol prices have fallen by nearly 9p per litre since the start of October due to a sharp drop in the cost of oil – $20 – during this time. It currently stands at $65 a barrel and has fallen due to concerns about an oversupply of oil. When this last occurred in 2014, it led to historically low oil prices.

The RAC added that drivers should be seeing a 5p per litre reduction in pump prices across the country.

Tips to help you save at the pumps

The RAC sets out the following tips to help drivers save on fuel in the run up to Christmas:

Look for deals

Some supermarkets run promotions, offering big discounts on the cost of petrol and diesel after spending a set amount in-store. If you shop there anyway, make use of these to bring the price of fuel down.

Compare average prices

The RAC Fuel Watch website carries the latest average prices for petrol and diesel. Try to ensure you pay no more than the average price per litre when you fill up.

Aim for competitive sites

Locations with a selection of fuel retailers that are reasonably close together generally have more competitive pricing – several supermarkets in close proximity to one another is almost a guarantee of a good deal on fuel. Conversely, isolated petrol stations – whether operated by a supermarket or not – tend to charge more, and in some cases significantly more.

Know your local area

The same branded retailer can charge a wildly different amount for fuel at its different sites so don’t assume a single supermarket on its own will always offer great value. Similarly, look for smaller, independent retailers that pride themselves on lower priced fuel.