Two of Britain's biggest supermarkets have triggered a new battle in the petrol price war by promising to reduce pump prices by 3p per litre to a new low of 94.9p per litre.

J Sainsbury announced it would reduce pump prices to the new level at the vast majority of its stores from tomorrow morning. It added that customers could get a further 5p reduction if they spend £50 in a Sainsbury's store, taking the pump price down to 89.9p.

Asda immediately retaliated with reductions of its own, promising 94.9p nationwide on unleaded petrol and 107.9p per litre on diesel. Asda guaranteed to hold the new prices in place for ten days regardless of the oil price.

The cuts take petrol down to the lowest levels since September 2007.

Darren Blackhurst, Asda's trading director said: "We are giving drivers some certainty in these uncertain times. It's simply not acceptable for anyone to be paying more than £1 for a litre of petrol no matter where they live in the UK. If they are, they're being ripped off whilst petrol retailers pocket the profit."

Oil prices have more than halved since reaching a peak of $147 a barrel in July and this morning tumbled a further $5 to a 16-month low of $66.

However, prices rebounded today by more than $1 on expectations that OPEC will move to shore up plummeting prices tomorrow by cutting production.

Last week, Prime Minister Gordon Brown urged petrol retailers nationwide to pass the lower cost of oil to motorists after Asda and Morrisons took a litre of petrol below £1 for the first time in almost a year. Earlier this week, Morrisons began the latest round in the price cuts by reducing a litre to 97.9p, to be followed by Asda and Tesco.

Xavier Vidal, convenience trading director at Sainsbury's, said today: "We have always strived to pass all cost savings onto our customers in an effort to help bring their weekly costs down."