Tesco became the third supermarket today to cut the price of unleaded fuel by 2p to 97.9p a litre, following Asda and Wm Morrison.

The move has followed a steep fall in the price of oil, which last week fell to a 14-month low of $68 a barrel but has since risen to $73.21. However, oil is trading well below an all-time high of $147 a barrel reached in July.

Last week, Gordon Brown called on Britain's supermarkets to pass on the falling price of oil to their customers.

Today’s reduction by Tesco is its third cut to petrol prices in just over a week. Britain's biggest supermarket was the first to reduce prices at the majority of its pumps by 3p per litre to an average of 102.9p.

However, its rivals went further when Asda trimmed prices by 5p to 99.9p and was swiftly followed by Morrisons, which implemented a 7p reduction to a litre of unleaded.

After the cut by its competitors, Tesco reduced its petrol prices to under £1 a litre but was trumped again this morning by Morrisons and Asda which both cut the cost of unleaded by 2p to 97.9p. Tesco has now followed suit.

Darren Blackhurst, trading director of Asda, said today: “We monitor prices daily and are committed to delivering the best and fairest prices for our customers, which is why all our petrol stations charge the same low price, rather than hiding behind local pricing.

“We expect oil prices to fluctuate in the coming weeks and will continue to pass on cost savings to customers whenever and wherever possible.”

Marc Bolland, chief executive of Morrisons, said: "We’re leading the market again with prices under 98p a litre. That’s great news for anyone buying their petrol from Morrisons from this morning."

Last week, Sainsbury's also reduced prices, by at least 3p, at half its 245 forecourts.

James Tan, head of petrol at Sainsbury’s, said today: “Following the cuts we made last week, we will once again be reducing prices at Sainsbury’s petrol stations across the UK, effective from tomorrow morning. We set our fuel prices locally to ensure that we offer customers a competitive price wherever they live.

Many will see prices drop as low as 97.9p for unleaded and 109.9p for diesel, and we will ensure that they are paying no more than 99.9p and 110.9p respectively. As the price of crude oil comes down we will, of course pass that saving onto motorists as quickly as possible.”

Money Central

The 10 cheapest cars to run

Ten ways to cut your petrol costs

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive