And an Asda spokesperson told Forecourt Trader that if fuel was cheaper than that in any of its trading areas, it would go lower to ensure that it was the cheapest.

On top of this latest price reduction, all Asda credit and store card holders are entitled to a further 2ppl discount when paying for fuel with their card.

Just days after Asda's price cuts, Tesco launched another burst of its 'spend £50 in store and get a 5ppl discount'. The chain said this was not in reponse to Asda's activity but had been planned for some time.

Ray Holloway, director of the PRA, said the supermarkets' move illustrated how they had to use fuel to promote the rest of their offer. "These are not business decisions they've made based on the cost of fuel going down but rather a way of promoting their stores at peak holiday times when their sales dip."

Oli Lodge, sales director at Hampshire-based Rusdene Services, said: "It's the same-old situation. It's a constant battle trying to make money. We just about survive charging 2ppl above but 3ppl above and we look foolish. And we've got a double whammy where we trade as there are 11 Shell company-owned sites and they're always quick to match the supermarkets' prices."

Mike Dearing, from Chatham Road Service Station in Maidstone, Kent said he was lucky because he did not have an Asda with a forecourt near him: "However we do have three Shell sites within half a mile and they're currently selling at 94.9ppl. We're at 96.9ppl but we do well - trading on our service and cleanliness." He added that it was easy for an outfit the size of Asda to subsidise lower fuel prices simply by moving the profits around within the business.

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