Asda became the first UK supermarket to cut the price of diesel in response to the slump in global oil prices, but Tesco has swiftly followed suit.
Asda, which is owned by the US retailer Walmart, lowered its diesel prices by 2p to a six-year low of 97.7p per litre, while unleaded remains at 99.7p per litre. Asda stressed these are the maximum prices motorists will pay at all of its 279 UK filling stations.
Tesco, Britain’s biggest retailer, also dropped its diesel price by 2p to 97.7p at all of its 500 filling stations across Britain by midday.
An oil glut has pushed crude prices down 30% since early December, with Brent crude sinking to less than $27 (£18) a barrel earlier this week. On Friday, it recovered to above $30 a barrel, helped by comments from the head of Saudi Arabia’s state oil giant.
Asda said it was the first to cut unleaded below £1 at the end of November and diesel below £1 this month. Its latest move came as the FairFuelUK Campaign accused retailers of fleecing Britain’s 37 million motorists, businesses and the haulage industry at the pumps.
While wholesale diesel prices have nearly matched the 55.8% fall in oil prices since May 2015, drivers are paying just 34.6% less at the pumps.
Based on the last five weeks’ average wholesale prices, diesel should now be at least 3p lower than petrol at the pumps, the campaign group said.
Steve Gooding, director of the RAC Foundation, a motoring research charity, said Asda’s announcement was “a welcome move but do not mistake it for a charitable act”.
He added: “The wholesale price of diesel has been below that of petrol since early December so it is right that the benefits retailers have enjoyed in reduced costs are finally passed on to motorists.
“It is also worth remembering that by far the biggest proportion of the pump price is tax. Some 75% of what we pay on the forecourts goes to the chancellor.”
