Supermarkets finally took initiative in reducing petrol prices long after the fall of global oil market prices. This was followed by a reduction in fuel surcharges by Virgin Atlantic and British Airways.

Asda and Morrisons reduced unleaded petrol’s price to 99.9p a litre, which brought the cost of one litre below £1 for the first time since December 2007. The overall fall in petrol price at Asda is 5p although diesel remained expensive with price falling to 110.9p from 116.9p. Asda termed the reduction as a welcome boost for customers.

While global oil prices fell from a high of $147 to less than $80 a barrel now, unleaded petrol and diesel were being sold at 120p and 130p a litre respectively at the peak of inflation this year.

According to AA president, Edmund King, lower petrol prices could be expected this winter and commented that supermarket’s lead paved the way for getting more realistic pump price which would help ease inflation pressure.

He added that three quarters of motorists had curtailed their spending or driving due to soaring oil prices; the cuts will be a boost for the economy.

According to analyst Damien Cox at the energy advisers John Hall Associates, the global economy has not seen the bottom yet and is likely to deteriorate further with more falls in oil prices.

Tesco set off the momentum for petrol price cuts by shaving 3p per litre joined by BP and Total in making similar cuts.