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Wednesday, 6 December, 2000, 17:43 GMT
Supermarkets cut petrol prices
Exterior of a Tesco store
Tesco is taking at least two pence a litre off its petrol prices
The UK supermarket chains Asda, Sainsbury's and Tesco are cutting their petrol prices.

The moves are being seen as a reaction to recent falls in the price of crude oil.

Sainsbury's said it was cutting pump prices for premium unleaded petrol and diesel by two pence a litre to 79.9p and 83.9p respectively.

Tesco said its price reductions would be of at least two pence a litre while Asda said it was trimming premium unleaded by an average of 1.2p a litre to a new "maximum" price of 79.9p.

'Brave move'

Crude oil was trading in London at less than $27 a barrel on Wednesday afternoon compared with prices of more than $35 a barrel hit in October, which were the highest for 10 years.

"The last week has seen a sustained drop in the price of crude oil," said Sainsbury's general manager for petrol Mark Hooper.

"We wanted to make sure this was passed on to motorists to ensure they were benefiting from the lowest price possible as quickly as possible."

Petrol Retailers' Association spokesman Jonathan Akerman said: "This is a brave move from Sainsbury's considering the price has just dropped and could easily rise again.

"It would appear that it [Sainsbury's] is pre-empting a stabilisation in the price of crude oil."

Further savings?

None of the major oil companies has yet said it will follow the supermarkets' move although Esso and Texaco both said they were monitoring rivals' prices and would remain competitive.

The Petrol Retailers' Association is predicting that further cuts in pump prices might come early next year if crude prices stabilise around present levels.

"This is the first major across-the-board drop in prices since the fuel crisis and we will be looking carefully to see what happens," the association's director Ray Holloway said.

"If the price of crude oil remains under $30 a barrel then I think we [motorists] could all be enjoying further savings."

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See also:

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31 Aug 00 | Business
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