Asda was first to announce its pricing cut, which combined with Asda’s national price cap reduces the price of diesel to 97.7ppl across its 279 filling stations – its lowest level since March 2009. The price of unleaded remains at 99.7ppl

Andy Peake, Asda’s senior petrol director, said: “We’re delighted to be the first retailer to take diesel to its lowest price level in over six years. This latest announcement shows that we’re committed to being the driving force behind lowering fuel prices across the UK regardless of where you live.”

Tesco and Morrisons have now followed suit with Tesco saying it is dropping the price of diesel to 97.7p at all of its 500  filling stations by midday today (22 January) while Morrisons has announced it's cutting 2p a litre off at all its forecourts.

Bryan Burger, Morrisons petrol retail director, said: “As long as oil prices continue to fall we’ll keep on bringing pump prices down.”

Following the initial announcement by Asda, RAC fuel spokesman Simon Williams said: “We would have liked to have seen a cut sooner, and one that goes further, to more closely reflect the price retailers have been buying diesel for, but this is nevertheless good news for motorists and of course businesses that run their fleet vehicles on diesel. Diesel has been sold on the wholesale market for less than unleaded petrol since early last month, yet drivers have had to wait more than six weeks for this to be only partially reflected at the pumps.

“The wholesale falls are driven by a world currently awash with oil, which dropped to just $26 a barrel this week, a 75% decline from its $115 high 18 months ago. This turned up the heat up on the supermarkets and big fuel retailers to cut the price of diesel. Data from RAC Fuel Watch suggests however that the pressure on prices remains, and we believe there is further scope for between 1p and 2p to come off the price of a litre of diesel within the next fortnight. There remains a 5p gap between the wholesale prices of both fuels.

“Nonetheless, we expect this latest price cut to be the trigger for the UK seeing the average price of diesel being sold on forecourts falling below the £1 mark – something that hasn’t happened since the end of March 2009.”