Big four supermarkets to cut petrol prices again on New Year's Day

Asda sparked the petrol price war after announcing it will cut unleaded and diesel prices by 2p/litre from tomorrow and Morrisons, Tesco and Sainsbury's quickly followed suit. As Asda sets a national price cap across all of its 245 forecourts, drivers will pay no more than 114.7p/litre for diesel and no more than 107.7p/litre for unleaded.

However, pump prices at Morrisons' 332 forecourts will vary regionally. Tesco says it will apply the 2p price drop to unleaded and diesel at all 500 of its filling stations, while Sainsbury's will drop prices by the same amount at all 298 of its forecourts.

Asda says the cut means petrol prices at its forecourts are at their lowest since summer 2010, and adds that since September this year it has slashed prices 13 times, taking 19p/litre off unleaded and 15p/litre off diesel.

Morrisons says this is its sixth fuel price cut since 1 December and both supermarkets say they are able to reduce pump prices due to the continuing fall of oil prices.

However, tomorrow's price drop doesn't necessarily mean that these supermarkets are the cheapest fuel providers for you. To find the lowest price in your area, use the website Petrolprices.com and see our Cheap Petrol and Diesel guide for more ways to save when filling up your tank.

According to the latest figures from Petrolprices.com, the average UK price for a litre of diesel was 120.02p/litre on Monday, while the cost of unleaded petrol stood at 113.39p/litre.