Asda fired the first shot by cutting the price on Sunday of unleaded petrol to 103.9 p a litre and the cost of diesel to 105.9 p a litre at 179 of its petrol stations.

Before Asda effected the changes, average UK unleaded petrol prices stood at 108.9 p, whilst the average UK diesel price was 110.2 p

David Miles, Asda’s commercial director, said: “With Christmas just around the corner, it’s a time when cash is tight and we want to help our customers make it go further. With this early Christmas present, we’re putting money back in our customers’ pockets wherever they fill up by moving quickly to pass the saving on as our costs fall.”

A spokesperson for Tesco said the retailers price cut would aid million of customers travelling to see family or friends during the holiday season.

She said: “We’re committed to being competitively priced on petrol and with hundreds of petrol stations throughout the country, customers can trust they will get a good price on petrol at Tesco .”

Asda will cut the price of fuel to 101.9p for petrol and 102.9p for diesel. Asda fuel prices are now almost 5p lower than the current national average.

Asda Cuts Petrol Price

Asda Canford Heath general store manager Keith May said: “Once again, we’re moving quickly to pass the saving on to all our customers as our costs fall. If motorists see prices of 105.9 or 106.9 pence per litre, they’d be better off driving past and finding their nearest Asda – even if it’s a 20-mile round trip, they’d still have more money left in their pocket once they’d filled up.”

Asda UK is not the only retailer that has cut the price of fuel with both Tesco’s and Sainsbury’s cutting prices at selected filling stations.

Shopping around could mean motorists save an average of £2.20 filling up a 55-litre tank.

Asda confirmed its latest cut was a result of falling product costs.