First, Asda announced that from today it would be knocking 2p a litre off the price of its petrol and 1p a litre off diesel.
Then Tesco responded by reducing its petrol "by up to 2p per litre" and cutting its diesel by 1p a litre.
Asda said its reductions would mean no one will pay more than 131.7p a litre for its petrol, with diesel coming down to 137.7p a litre.
The reductions follow a 2p cut in petrol and a 1p cut in diesel announced by Asda last week.
The cuts were welcomed by the RAC and the AA.
Pete Williams, the RAC's head of external affairs, said: "This is exactly the action we wanted to see as a result of the drop in wholesale prices that has taken place over the past couple of weeks.
"We are now looking for other retailers to follow suit so that motorists benefit wherever they buy their fuel and we expect this to happen over the next few days."
Andy Peake, Asda's petrol trading director, said: "Our national price cap on fuel benefits everyone across the country."