The move has seen Tesco, Morrisons, Sainsbury's and Asda all reduced prices by 2p a litre on both petrol and diesel.

The news follows the recent announcement by the RAC that petrol prices could reach £1 a litre.

Commenting on the latest price cuts, RAC fuel spokesman Simon Williams said: ‘With the average price of petrol already at levels not seen since January 2010, this latest cut will send the average price (112p) even lower, which is more great news for the motorist as millions head back to work following the festive holiday.

‘With a barrel of Brent crude oil now at around $55 helping to reduce wholesale prices, we think there is still more room to cut further, perhaps by as much as 5p to 6p by the end of January.'