Asda and Morrisons kicked off a new petrol price war by slashing the cost of a litre by 2p to 114.7p after coronavirus contributed to the largest single-day drop in oil prices in 30 years.
It comes as an oil war between the Saudis and Russians sent the FTSE 100 tumbling to its worst day since the 2008 crash and a tanking of oil prices tanking around the world.
Motorists filling up at Asda's 322 petrol stations will pay no more than 114.7ppl for petrol and 116.7ppl for diesel.
Asda, which was the first supermarket to announce a price cut on Tuesday, said these are its lowest fuel prices since November 2017. The retailer has brought fuel prices down by up to 11ppl since January.
Morrisons soon joined them in cutting prices at its 335 UK filling stations.
Coronavirus has led to a decline in oil consumption in Asia, as demand has fallen due to factors including travel restrictions and home isolation.
Last week, major oil producing nations who are part of OPEC - as well as non-OPEC member Russia - met in Vienna to discuss a deal to curb production so they could stop the oil price falling.
Top oil exporter Saudi Arabia slashed its oil prices at the weekend, after Russia would not back sharp production cuts.
Oil cartel Opec and its ally Russia had previously worked together on production curbs and the benchmark Brent oil futures plunged to a low of $31.02 a barrel on Monday, in volatile energy markets.
Experts say that for motorists and other consumers, it all means oil will get cheaper, which should mean petrol and diesel pump prices get cheaper too.
Reacting to the petrol and diesel price cuts announced today by UK supermarkets, RAC fuel spokesman Simon Williams said: “After such a sharp drop in the price of oil it’s right that pump prices start falling, and quickly. We hope other retailers large and small follow Asda’s lead by trimming their prices and delivering good value to UK drivers.
“But despite these headline-grabbing price reductions, it remains the case that the wholesale price of both petrol and diesel has fallen so far that we really should be seeing far deeper cuts at the pumps.
"Even with these cuts, we believe there is scope for a further 7p to 8p to come off the price of both fuels over the next fortnight – so we will be keeping a close eye on what the supermarkets do in the coming days."
READ MORE: What the new labels at petrol stations mean
On Tuesday shares in Europe slipped back into negative territory continuing to slide a day after suffering the biggest falls since the 2008 financial crisis.
London's FTSE 100 ended the day almost flat, after a 7.7% drop in the previous session.
But after falling as much as 30% on Monday, oil prices rebounded slightly, with Brent crude more than 7% higher.
“The market is awash with oil, with the fall in demand brought about by the coronavirus outbreak and new tensions between Saudi Arabia and Russia," added Mr Williams.
"Collaboration between Russia and OPEC, of which Saudi Arabia is a key member, on the quantities of oil produced had helped to prop up the oil price in the last few years, but with the apparent end of their pact it is difficult to see oil prices rising very much in the next few weeks.
“Clearly, with all the current volatility this is no time for the Chancellor to consider a hike in fuel duty at today's Budget.”
AA fuel price spokesman Luke Bosdet said: "For the past two years, UK drivers have had to endure petrol averaging 125p a litre - 15p a litre higher than during the lows of 2015 and 2016.
"Now, at last, some real financial relief will flow from the pumps. However, there is currently a 6p, soon to be an 8p, gap between the UK average price of petrol and what competitive supermarkets like Asda charge for it.
"That's a more than £4-a-tank difference between forecourts that have their customers' interests at heart and those that don't."
Meanwhile taxpayer-owned bank RBS is offering a three-month holiday on mortgage and loan repayments for customers affected by the coronavirus outbreak.
TSB and Lloyds said they would also allow the mortgage window, and the banks said savers could close fixed-term savings accounts without charge.
The move is party of efforts by UK banks to stem a potential tide of defaults if customers get ill or lose pay from employers and clients as a result of the outbreak.
Banks are also announcing extra support for affected businesses.
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