The end of the war is one reason for cheaper petrol

Forecourt prices in Britain have been cut by an average of 1p to 2p a litre.

Asda and Tesco led the reductions on Thursday night with rivals Sainsbury's and Safeway quickly following suit, and now all the major petrol companies have done the same.

The AA said the average price of unleaded petrol was down to 78.43p a litre, with diesel at 81.03p a litre.

The average price of crude oil was down to 27 dollars a barrel on Wednesday night after an October high of 35 dollars.

Ray Holloway, spokesman for the Petrol Retailers' Association, said the end of the Iraqi war was just one of the factors causing a price drop.

AVERAGE UNLEADED PETROL PRICES PER LITRE, SATURDAY Asda: 75.4p Tesco: 77.7p Sainsbury's: 79.9p

An end to a harsh winter in the northern hemisphere and the solution of refining and distribution problems in the United States also played a major role, he said.

"Motorists will be able to take advantage of a competitive market working its way through. It's a bit of soft landing, I think we will see prices drop steadily over the coming weeks rather than instantaneously.

"It's really a case of the supermarkets leading the oil companies by the nose."

'Shop around'

A spokesman for Esso said it had adjusted prices between 1p and 2p, with unleaded average price between 74.9p and 77.9p a litre and diesel at between 76.9p and 79.9p a litre.

BP, Texaco, Shell and Q8 all said they would be matching local competition at the pumps.

We will see prices drop steadily over the coming weeks rather than instantaneously Ray Holloway, Petrol Retailers' Association

A spokeswoman for the AA said it was still advising people to shop around, because of large regional variations in prices.

"The price of petrol in the UK is still the dearest in Europe with £15 of every £20 tank-full going straight to the chancellor in tax," she said.

But while competition is bringing petrol prices down, new rises may not be too far away.

In the Budget, Chancellor Gordon Brown delayed the usual petrol tax rise until the start of October.

It means that every litre could cost a penny extra by the autumn.

And an Opec (Organisation of the Petroleum Exporting Countries) meeting in Vienna scheduled for 22 April could stop the price of crude oil dropping any further.