Cuts see petrol prices tumble to three-year low

Jan 1 2009 By Henryk Zientek

TESCO has fired the latest shot in a supermarket price war by slashing 3p a litre off the price of unleaded and diesel at its 430 filling stations.

The price cut follows figures from motoring organisation the AA showing the price of petrol has hit a three-year low.

The AA said the average cost of petrol at the beginning of this week was 87.79p a litre, compared with 88.27p at the end of December 2005.

Diesel now averages 99.72p a litre – the lowest price since November, 2007.

Petrol hit a record high of 119.7p a litre in July this year – but price falls since then means the average UK driver is now paying nearly £16 less to fill up a typical 50-litre tank than during the summer.

A family with two petrol cars is now spending £68.39 less a month on fuel on average.

Tesco said its lowest petrol price was now 82.9p a litre.

Chris Stern, of Paddock-based C & J Stern (Oils) Ltd, said other retailers were likely to follow Tesco’s lead.

He said: "All the pointers are that prices will continue to decline, although the fall in the value of sterling against the dollar will put a brake on any ‘serious’ fall in price because oil has to be paid for in dollars."

Mr Stern said prices at the pumps in Huddersfield were about 85.9p for unleaded and 97.7p for diesel.