Supermarket giant Tesco said it was cutting the cost of petrol by 3p a litre as oil prices fell to their lowest level for a year.
Supermarket giant Tesco said it was cutting the cost of petrol by 3p a litre as oil prices fell to their lowest level for a year.
The retailer is lowering unleaded and diesel prices by 3p across its 430 UK forecourts with immediate effect. It follows a penny cut by rival Asda at the start of this week, and price drops made by a host of retailers last month.
Light, sweet crude for November delivery on New York Mercantile Exchange - the world's benchmark price - tumbled as low as $82 a barrel in early trading yesterday, the lowest price since mid-October last year.
Mounting fears of a global recession, which will weaken oil demand, have seen the price fall in recent days. Nymex crude is now 44% cheaper than the $147 high hit in July. London November Brent futures also fell below $80 a barrel.
The average price of unleaded petrol across the UK on Thursday was 109.2p a litre, with diesel costing 120.6p, according to the AA.
Petrol now costs 9% less than the high of 119.9p seen on July 17, with diesel prices nearly 10% cheaper.
The Petrol Retailers Association said oil price changes typically take between six and eight weeks to filter down to forecourts.
AA spokesman Luke Bosdet said: "It's good to see that somebody other than Morrisons and Asda is taking the lead in dropping prices.
"Obviously we will be keeping watch to see whether we have got some towns where petrol is 3p cheaper now. We think it is quite unfair that you can be charged extra for filling up a tank just for living in the wrong town."
The latest fall in the price of oil came as stock markets plunged around the world on recession fears. London's FTSE dived 10% at one point as investors looked ahead to a potential major downturn.
Energy-facing stocks were taking a battering, with oil giant BP 7% lower, and rival Shell nearly 9% down.
Gold prices jumped more than 4% yesterday as investors scrambled for safe havens.
The precious metal jumped $38.5 to $925 (£545) an ounce on commodity markets as panicky investors switched funds from shares and even bank accounts to try and protect their funds. There has also been heavy demand for rock-solid government-guaranteed Treasury stocks.
In another reflection of gold's attractiveness, gold mining projects firm Randgold Resources was one of the London market's handful of winners yesterday. Its shares were up 3%.
A lot of money was also being put into short-dated government bonds, or gilts, which have a ready market and mature within months.
