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Supermarket chain Asda is preparing to cut 2p off the price of a litre of petrol - a move likely to prompt a new round of forecourt price reductions.
The Wal-Mart owned grocer will lower the price of a litre of unleaded from tomorrow morning from 94.9p to 92.9p - the lowest price in more than a year. It operates 172 filling stations.
It is the ninth cut in Asda's petrol price since July. The last reduction was on October 23.
According to the website petrolprices.com, which monitors prices at garages around the country, the average price nationwide for unleaded is now 97.3p a litre.
The oil price fell again this morning, with Brent down $1.60 to just over $60 a barrel. Oil peaked at $147.27 a barrel in July and six days later there followed a peak in the average UK pump prices for petrol at 119.7p a litre.
Since then, fears of a global recession have strengthened, wiping away more than half of the dollar-value of a barrel of oil.
Asda's move comes just days after the chancellor, Alistair Darling, demanded that oil companies move faster to pass on the fall in prices to customers on station forecourts. The prime minister, Gordon Brown, has also asked the Office of Fair Trading to monitor forecourt prices to make sure retailers were not profiteering as oil prices fell.
Darling said: "A few months ago, the price of crude oil coming out of the ground was about $150 a barrel. Now it's down to about $60. I want to see that reduction passed on to the pumps as quickly as possible."
He was speaking after Shell smashed analyst forecasts when it reported a profit of $11bn (£6.98bn) for the third quarter of 2008, up from $6.4bn the previous year.
Asda's chief executive said Asda was making important moves to help consumers, but cutting petrol and food prices, and called on the banks to do the same, by passing on the full 1.5 percentage point cut in interest rates announced earlier today by the monetary policy committee.
"We welcome today's interest rate cut, it should go some way towards restoring consumer confidence this side of Christmas", he said, but added: "With disposable incomes continuing to fall it is essential that banks and building societies pass on this saving to their customers. Everyone has to play their part and financial institutions are not exempt."
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