Stores drop petrol price below £1

The cut means a 5p a litre reduction in the price of petrol at Asda pumps, with a litre of diesel falling from 116.9p to 110.9p.

This is the first time since last December that petrol has been under £1 in the UK, with unleaded going over 120p a litre and diesel over 130p during the worst of this year's price rises.

"This is a welcome boost for consumers at a time of economic gloom and high inflation," said Asda spokeswoman Jennifer England.

She went on: "Unlike some of our competitors, our price is constant throughout the country and does not vary from area to area. This reduction will come as a relief to road users."

Supermarket Morrisons said later it had reduced its petrol to 99.9p a litre and cut the price of diesel to 111.9p a litre.

Oil prices slid to their lowest level for nearly 14 months amid concerns that the world economy is heading for a major slowdown.

Light, sweet crude for November delivery on the New York Mercantile Exchange (Nymex) was trading more than three dollars lower at 75.10 US dollars a barrel.

Prices dipped as low as 74.97 US dollars at one point, the lowest since the start of September last year.

Last week Prime Minister Gordon Brown said he wanted this price cut to be passed on to consumers "as quickly as possible".