Retailers have been accused of being slow to pass on oil price falls.
Supermarket chains Asda and Morrison's and oil giant BP have cut the price of petrol to below £1 for the first time since December last year.
They are now selling unleaded petrol at 99.9 pence per litre and also cutting the price of diesel, as the price of oil falls.
BP has said the new price would apply "at a number" of its outlets.
The supermarket group Sainsbury's has also said it will now cut its forecourt petrol prices on Thursday.
A barrel of oil has fallen from a high of around $147 in July to less than $80, and the firms said they were passing this drop on to customers.
"We're taking the lead again in cutting fuel prices and taking unleaded back below a pound a litre," said Morrisons' chief executive Marc Bolland.
"This is strong support for the millions of motorists that are served at our forecourts."
Asda said the move would be a "welcome boost for consumers at a time of economic gloom and high inflation".
"This reduction will come as a relief to road users," a spokeswoman said.
BP said the new petrol price would apply at "a number" of its petrol stations, but added it aimed to remain "as competitve as possible".
Back in July, UK fuel prices hit record highs on the back of crude oil also hitting all-time peaks.
Petrol prices touched 119.7p a litre and diesel went as high as 133.25p.
Last week, Tesco sparked a new round of price cuts after slashing prices by 3p a litre at its 430 forecourts.
But there has been criticism that the petrol retailers have not been quick enough to cut their prices.
Prime Minister Gordon Brown has said he wants the drop in oil prices to be passed on to consumers "as quickly as possible".
Analysts expect further price falls at the pump in the coming months.
"With the economic situation looking the way it is, I don't think we have seen the bottom yet. There's still a little bit to come out of this," said Damien Cox, senior analyst at energy adviser John Hall Associates.
RAC motoring strategist Adrian Tink said that the higher prices had seen the average motorist spending £1,300 a year filling their fuel tank.
"At least that figure should start to come down now and motorists will see a significant difference in their wallet when they next visit the forecourt," Mr Tink said.
He added that there were often "huge" differences in price, depending on region.
"We are calling on all retailers across the country to get their petrol prices under the £1 barrier quickly to help Britain's beleaguered motorists."