Stores step up petrol war continues

Supermarkets and filling stations launched the latest battle in the petrol price war yesterday with a new round of cuts at the pumps.

Asda announced that it was cutting a penny off the price of a litre, a move followed swiftly by Tesco. The oil giant BP then said it had cut between 1p and 2p off the price of a litre at a quarter of its petrol stations.

The cuts come amid the continuing drop in the price of crude oil since the end of the conflict in Iraq.

Asda was the first to announce a 1p reduction last Friday, immediately followed by Tesco and Safeway. It came after the supermarkets cut the price of petrol at their forecourts the previous week by between 1p and 2p in time for the bank holiday weekend.

Asda's latest cut takes the average price for a litre of unleaded fuel on its forecourts to 73.4p, with diesel at 75.7p.

The price reductions came as Shell posted record profits after seeing oil prices soar in the run-up to the war on Iraq.