Will Morrisons price cut spark a new petrol prices war?

Morrisons has reduced the price of its petrol and diesel.
Morrisons has reduced the price of its petrol and diesel.

Supermarket giant Morrisons has announced fuel price cuts amid a fall in wholesale costs.

The supermarket is cutting the cost of diesel by 2p per litre and unleaded by 1p at its 333 filling stations across the UK.

A drop in the price of oil and a jump in the value of the pound has reduced the wholesale cost of fuel for retailers.

Average pump prices for petrol and diesel both increased by more than 1p per litre across forecourts last month, RAC analysis found.

However, the price of a barrel of oil fell from a mid-month high of 55 US dollars (£43) to 49 dollars (£38) on April 27.

This caused the wholesale price of petrol to end April 3.5p lower than the start of the month, with diesel dropping by 2.5p.

Morrisons services director Roger Fogg said: "We are again bringing prices down quickly and we hope that this move will help motorists' budgets stretch a little further."

RAC fuel spokesman Simon Williams said: "It is good news that this comes just as we were calling on retailers to cut prices at the pump but there is scope for them to go deeper.

"This is just the start, and we are confident that the move will be followed by other supermarkets.

"It would be good if they surprised motorists with a bullish 3p a litre cut.

"This is long overdue as our April Fuel Watch figures indicate that prices should be coming down as we saw the wholesale price of petrol and diesel fall during last month by around 3p a litre."

It costs an average of £65.37 to fill up a 55-litre petrol car - a 79p rise during April. The diesel equivalent is £66.29, up 64p.

Mr Williams added: "Motorists need to be able to trust retailers to be transparent when they are benefiting from significant savings in the wholesale price.

"It is time to do the right thing and drop prices - otherwise they could be accused of rocket and feather pricing."