Motorists in line for savings as petrol price war erupts

It means motorists using a Sainsbury's forecourt will pay no more than 129.9p a litre for petrol and 136.9p for diesel - equivalent to around £91 to £95 to fill up a typical family car.

Meanwhile, Asda has also announced a price ceiling which means that its ­customers will now pay no more than 128.7p a litre for petrol and 135.7p for diesel.

Tesco then followed suit, stating it was cutting its petrol from yesterday by up to 3p a litre and its diesel by up to 2p. It was the company's second reduction of the week.

It is the latest round of cuts by supermarkets which have been slashing fuel prices in competition with one another for two years.

However, they faced criticism in August when the AA urged them to extend price matching policies on groceries to include fuel after research revealed motorists were facing a postcode lottery, with petrol prices varying by as much as 6p per litre depending on the level of local competition.

Reacting to the announcement, the AA said the price ceilings set by Asda and Sainsbury's "should turn what has been a phoney fuel price war into one that means something to hard-pressed drivers, their families and businesses".

It comes after wholesale prices returned to where they were at the turn of the year, with pump prices still considerably higher.

Paul Watters, head of AA Public Affairs, said: "This weekend we will have to see whether UK petrol prices get closer to where they were in December when the cost of petrol to the retailer was the same. However, with Sainsbury's price cut, this is looking more hopeful.

"At the start of the year, UK motorists were told officially that there is little evidence of pump prices shooting up like a rocket and falling like a feather. In some towns, drivers would say they are choking on feathers every time they go to fill up."

Andy Peake, Asda's petrol ­trading director, said: "Families across Britain are crying out for help when it comes to managing their budgets and we know every fuel reduction makes a real difference.

"Our prices are the lowest they have been all year and our national price cap on fuel benefits everyone across the country, meaning that no-one filling up at Asda is forced to pay a premium for their fuel because of where they live."

Richard Crampton, Sainsbury's head of fuel, said: "We want our customers to benefit from the recent drop in the wholesale price of fuel."

Pete Williams, the RAC's head of external affairs said he was pleased major fuel retailers were passing on the wholesale price drop to motorists.

He said: "It may only seem a small saving per tank but the overall savings add up over time and it's important the ­retailers pass on these savings as quickly as possible to maintain the confidence and trust of motorists."

However, concerns were also raised about the effect the dominance of supermarkets in the price war could have on ­independent retailers and rural areas.

Douglas Robertson, of the ­Scottish Motor Trade Association, said: "Any reduction in fuel prices is a good thing for motorists, but it also makes sense to supermarkets because they can use it as a loss leader to entice customers into their stores to spend more.

"The possible drawback in supermarkets leading the way in price cuts is they can force independent retailers out of ­business, and end up reducing competition.

"So it's good for motorists who live near supermarkets, but not so good for those who don't."

The fall in prices will be a huge relief for motorists who, only weeks ago, had been warned they could be hit hard by the continuing instability in the Middle East.

Since the second week of this September, after the US and Russia defused the Syrian chemical ­weapons crisis, the wholesale price of petrol fell from 47p a litre to just below 45p a litre. It had hit a late summer high of 52p a litre in the last week of August.