Business

Supermarkets cut petrol price to below £1 a litre

A customer pulls the nozzle of a petrol pump from their car at a petrol station in Egham Image copyright Getty Images

Morrisons, Tesco and Sainsbury's have cut the petrol price below £1 a litre, the lowest UK price level, excluding special promotions, since 2009.

The supermarket chains will be selling petrol at 99.9p per litre and cutting diesel by 1p a litre.

The price of crude oil continues to fall, with Brent now below $40 a barrel and close to a seven-year low.

Asda is running a weekend 99.7p promotion on petrol, with diesel at 103.7p per litre until Sunday.

Morrisons moved first and was followed later in the day by Tesco and Sainsbury's.

Morrisons' petrol retail director Bryan Burger said: "Today, for the first time in more than six years, we are moving unleaded prices down to below £1 a litre.

"This is a moment where motorists will feel some relief after being clobbered by tax and price rises for the last decade."

The company said it would hold the price "for as long as possible" but that it remained subject to changes in the oil and currency markets.

On Wednesday, automotive group the RAC said supermarkets should do the right thing" and pass on savings from falling oil prices.

There should be at least a 3p-a-litre drop for petrol prices and 5p for diesel, taking the average price to 103p and 104p respectively, it said.

However, experts have warned that the falling oil prices are turning into "the nightmare before Christmas" for the oil industry.

KPMG says the expectation that the price will be "lower for longer" is stretching into 2016, and making companies in the oil sector less willing or able to operate high-cost fields.

Some companies are running out of options other than shutting down oil fields earlier than planned, or being sold at low valuations, head of oil and gas Mark Andrews said.

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