Taking over Safeway has given Morrisons stronger buying power

The supermarket chain said it was reducing the price of unleaded petrol by 3.5p to 79.9p per litre.

The 4% cut was quickly matched by rivals Asda, Sainsbury's and Tesco while Shell, Esso and BP said they would shave a few pence off prices.

The moves follow recent falls in the price of crude oil but analysts have warned that prices might rebound soon.

Using low petrol prices to get customers into stores is a tactic commonly used by supermarkets.

It is designed to increase footfall in stores in the lucrative pre-Christmas period.

The oil giants Shell, Esso and BP also responded, saying they would cut their forecourt prices by up to three pence a litre.

Passing it on

RAC spokesman Philip Hale said: "Running a car already costs over �400 per month and the high fuel prices have really strained drivers' wallets.

"This will come as a great relief as we head into the bumper festive travel period."

Morrisons has also cut diesel to 83.9p per litre, the new price reflecting the current difference in the cost of the two fuels.

"The cost of crude oil and refined product has fallen in the last few days," said Phil Maud, Morrisons' petrol filling stations director.

The chain said it was "passing on the saving quickly, for cheaper prices at the pumps ahead of Christmas".

"The combination of Morrisons and Safeway has resulted in a very strong, competitive force in the fuel retailing business," said Mr Maud.