Supermarket petrol price cuts continues as Morrisons reignites war

Morrisons and Asda will take the supermarket price battle onto the forecourts on Monday, responding to petrol price cuts from Tesco on Friday.

Fuel prices offered by Bradford-based Morrisons will be cut by 4p on a litre of diesel and up to 1p from a litre of petrol from Monday, according to the Sunday Times.

Asda will trim its diesel price by 1p and promised motorists will pay no more than 107.7p for a litre of diesel and 111.7p for unleaded from its pumps.

The price cut by Morrisons’ will lower its average cost of a litre of diesel to 107p and 112p for a litre of unleaded petrol across its superstores' forecourts.

As supermarkets battle to regain ground from surging discounters they are luring car-based customers to their big stores with such cuts, which have been aided by the slump in oil prices, which have halved in 12 months to below $50 a barrel.

Tesco, the UK's biggest fuel retailer, followed cuts in July with further 2p cuts on the cost of diesel per litre on Friday, with 1p off unleaded petrol at all of its 500 filling stations.

Sainsbury’s and Asda followed suit.

Ex-Tesco boss Sir Terry Leahy recently predicted the Big Four supermarkets will benefit as plunging fuel costs tempt consumers back.

The recent drop in the oil price is likely to push the UK back into deflation for in coming months.

The Bank of England expects the oil price to be $57 per barrel in the fourth quarter of the year, with markets now factoring in a price of just $51 per barrel.