The average price of unleaded petrol is now 109.1p a litre and diesel 120.4p – meaning a typical 50-litre refill is now £5.33 cheaper than when unleaded reached a record high of 119.7p in July.

But prices are still more than 11p higher than the 97.65p a litre this time last year.

Supermarket giant Tesco lowered unleaded and diesel by 3p across its 430 forecourts yesterday. The move follows a penny cut by rival Asda at the start of the week and price drops made by a host of retailers last month.

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Total also said it was dropping the price of petrol and diesel by 3p per litre at its network of 500 service stations across England and Wales.

And BP said it reduced pump prices at its 300 company-owned stores by an average of 3p per litre and some sites by 5p per litre.

A BP spokeswoman said: "We wanted to pass on the reductions to our customers."

AA spokesman Paul Watters said: "The 3p drop in the price of petrol is very welcome, particularly with another supermarket taking the lead in price reductions. This should cut the cost of filling a tank by £1.50, which will help to offset grocery and domestic energy inflation.

"The AA will, however, be reviewing the price difference between neighbouring towns, which has been a source of anger among drivers.

"If today's cut still leaves the cheapest fuel in many towns, particularly in the South, 3p or 4p more expensive than another just down the road, that will still see many drivers missing out because they happen to live in the wrong towns.

"This week the AA has told the Exchequer Secretary to the Treasury that the Chancellor should in his pre-Budget report commit to a fuel duty freeze in these difficult times."

Director of the Petrol Retailers Association (PRA) Ray Holloway said: "Gordon Brown always has the ability to reduce fuel prices through a fuel tax reduction, but avoids it.

"The price of fuel at the pump is influenced by a range of factors beyond just the price of a barrel of oil but despite this, forecourt retailers have still managed to reduce the cost of fuel to the motorist at the expense of their own profit margin during recent weeks.

"Prices for crude oil and forecourt fuel are obviously linked but they do not move in tandem. Therefore they do not automatically move up or down at the same time."