First Asda announced that from today it was cutting up to 2p a litre off its petrol and 1p off its diesel.

Then Tesco said it, too, was reducing its petrol by up to 2p a litre while also cutting diesel by 1p - also from today.

The Asda reductions mean its customers will pay no more than 126.7p a litre for petrol and 134.7p for diesel.

Asda petrol trading director Andy Peake said: "With Christmas just around the corner, and finances tighter than ever, we're pleased we can do our bit to make our customers' hard-earned cash go a little further."

Pete Williams, head of external affairs at the RAC, said: "Cheaper fuel is something motorists will widely welcome and comes ahead of both last-minute Christmas shopping this weekend, and the rush on the roads next week.

"The wholesale price of fuel is at its lowest rate since early November so we hope that other retailers pass on a similar saving."