Supermarkets have launched a petrol price war after warnings drivers would be outraged if they failed to pass on cuts to the wholesale cost of oil.

Asda, Tesco, Sainsburys and Morrisons all rushed out plans to cut prices at the pumps by 1p a litre yesterday.

The move was announced hours after an intervention by Liberal Democrat Treasury Chief Secretary and Highland MP Danny Alexander, who warned retailers would be expected to pass on price cuts.

Mr Alexander said there would be outrage if suspicions that prices were kept unnecessarily high prove to be true.

That view was echoed by the Chancellor George Osborne, who said the message was "very clear: the oil price has fallen and we expect that to be passed on to people at petrol stations."

But Labour accused Mr ­Alexander's Coalition Government of forcing motorists to pay an extra 3p in every litre of fuel, by raising the VAT rate in 2011.

Campaigners say oil firms are quick to increase prices when wholesale costs rise, but slow to bring them down again.

The Serious Fraud Office has said that it is looking at the way oil firms set prices, although it has not launched a formal inquiry.

Oil prices have fallen by about one-third since the summer, following a drop in global demand. The change has led to fears that it reflects a slowdown in the global economic recovery.

Prices fell again this week, with Brent crude dipping to a four-year low of $82 (£52) a barrel.

RAC spokesman Pete Williams said: "We welcome the move by some fuel retailers to cut the price at the pump and hope others will follow suit swiftly.

"Motorists will be delighted to see the price of unleaded dropping below £1.20 for the first time in four years."

But he said that the moves did not go far enough."The RAC is calling for a further 4p cut in unleaded and 2p cut in the price of diesel to be fair to motorists, " he said.

Tesco said it was the UK's biggest fuel retailer and wanted to make "continuing efforts to pass on savings to customers and help bring down the cost of living".

Chris Leslie MP, Labour's Shadow Chief Secretary to the Treasury, said it was right that drivers should benefit from falling oil prices, "but since 2011 people have paid 3p more on every litre of petrol because the LibDems broke their promise and backed the Tories in raising VAT."

The Chancellor has previously tried to ease public anger over rising pump prices by scrapping planned increases in the fuel duty.

The Liberal Democrats hit back at Labour's attack, saying prices would have been even higher under the opposition party's plans. "If this is how Labour do maths it's no wonder they crashed the economy and forget to talk about the deficit," a spokesman said.

"The truth is if we did not axe their plans to increase fuel taxes by inflation, scrap their fuel duty escalator and cut fuel duty ourselves, motorists would now be paying 20p a litre more."

Lobby group FairFuelUK called on the Office of Fair ­Trading to launch an inquiry into petrol prices and demanded a 3p cut in fuel duty.

Former Top Gear presenter Quentin Willson, who now fronts the campaigning group, said: "In our opinion, the sooner we have legislation to stop opportunistic oil speculation by non-physical trading activity, the better."