Morrisons garageBarry Batchelor/PA Archive/Press Association Images

The supermarket fuel price war has been stepped up yet again, by Morrisons, which has announced that from tomorrow, it will cut 2p off a litre of both unleaded and diesel. It's the fourth price cut since the Eurozone crisis started.

However, the AA is warning that these cuts are not enough to ensure motorists aren't being ripped off.

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The cuts

The cuts themselves will come as a welcome relief for motorists, seeing prices fall to just over £1.35-a-litre for unleaded and £1.41 for diesel. Mark Todd, Petrol Director for Morrisons, said: "The continued bad news in financial markets is good news for motorists. After seeing continued reductions in the price of oil we are taking the opportunity to bring down prices at the petrol pump."

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It is also highly likely to inspire further cuts across the supermarkets to match Morrisons. Last week they all took 2p off the price of a litre of petrol after Asda broke ranks and cut the price. This came only very shortly after another 2p cut all round for the May bank holiday weekend.

In many cases it is likely to mean that the supermarkets have the cheapest petrol in town, although the only way to be sure is to check out the competition at a site like petrolprices.com.

Not enough

The AA welcomed the move, and said it didn't have an axe to grind with Morrisons, or indeed with any of the other supermarkets. It singled out Asda as a 'shining light', having done much to put pressure on the industry to bring prices down, with its forthright price reduction strategy. However, a spokesman pointed out that across the industry petrol prices should be falling further and faster.

He said: "The wholesale price has come down 10p a litre across North Western Europe. We wouldn't expect prices at the pumps to fall immediately, but by now we would have expected price drops of 7p. The work we are doing right now shows that across the whole of the industry in the UK, prices have come down an average of 4p."

He added that there were plenty of petrol stations bucking the trend, and that there were supermarkets and independent petrol stations which have now cut prices 7p from the peak, which demonstrates that it is: "Not beyond the ability of retailers to cut prices by this amount."

And he warned that unless the industry was more responsive, we could see regulated prices in the UK. He says: "Germany has just regulated petrol prices. We are seeing politicians in Scotland and Northern Ireland exasperated over the cost of petrol. If UK drivers continue to be treated in the way they have been treated in the last month, pressure will build for us to follow Germany's example."

He said this isn't what the AA wants, as it would far prefer a transparent market where fair competition between suppliers kept prices keen however, "There is clearly momentum in Europe for regulation."

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