Asda and Morrisons to cut petrol prices

Asda will reduce prices by 2p per litre tomorrow at most of its 188 forecourts, but analysts believe further cuts are necessary.

It is also introducing a cap of 132.7p per litre for unleaded and 136.7p per litre for diesel at all its filling stations.

Rival supermarket Morrisons will implement a 2p per litre cut to unleaded and a 1p cut to diesel tomorrow but is not implementing a cap.

It's average prices before the drop were 134.6p for unleaded and 138.8p for diesel.

This compares to an average 136.5p for unleaded and 140.6p for diesel today, according to the Petrolprices.com website.

Are the drops enough?

While petrol prices are not set exclusively by the oil price, the typical 1.5% drop for motorists compares to an over 10% drop in the oil price over the past week.

The price of a barrel stood at just under $120 on 1 August, compared to exactly $106 at 2.30pm today.

John Franklin, from motoring giant the RAC, says: "This is a step in the right direction but clearly there needs to be more pressure on the petrol retailers to get petrol prices lower.

"However, it does take time for the oil price fall to work its way through into lower petrol prices."

Fellow motoring organisation, the AA, says firms should reduce prices by 4p a litre when the cuts feed through. It also says some independent suppliers dropped prices over the weekend.

The news doesn't mean Asda or Morrisons will be cheapest for all motorists. To find the best deal in your area, check Petrolprices.com.

Over the past week, the price of oil has plunged due to the eurozone and US debt crises.