Morrisons fuel filling stationBritain’s big three supermarket fuel retailers have today announced another round of fuel price cuts, dropping the price of a litre of fuel to as little as 120.7p.

Asda, Morrisons and Tesco have all dropped their forecourt prices, with Asda leading the way with a maximum nationwide charge of 120.7p for a litre of unleaded, and 124.7p for a litre of diesel.

The other two supermarkets have cut 2p a litre from their prices, although neither offers the nationwide cap of Asda (both instead prefer to offer loyalty schemes, which Asda does not).

The latest cuts support the AA’s October fuel price report which revealed the price of diesel has now fallen back below the £6 a gallon mark, following unleaded which dropped beneath the figure a few months ago.

The average per litre price of unleaded was 127.2p in October, with diesel costing 131.3p a litre. At supermarkets, the price was 125.4p a litre for unleaded and 129.3p a litre for diesel – the gap between supermarkets and the average UK fuel price has risen to 1.8p a litre.

It’s falling oil prices that, said the AA, “have triggered a supermarket price war”. The association said it was Sainsbury’s leading the way in October, with “much lower pump prices across all its forecourts”; as the supermarket brand is not among those cutting prices today, further fuel price falls could yet be in store.

Indeed, the RAC agrees there is still room for further cuts. Speaking to the Guardian, its spokesman Simon Williams said: “This is not an unexpected cut as there is plenty of margin between wholesale and retail costs for prices to go lower still.

“Oil continues to be pumped way above global demand, which combined with a strong pound is good news for motorists.”