Tesco cuts price of fuel by 3p

The price of petrol has continued to fall after supermarket Tesco cut 3p a litre from unleaded and diesel at its 430 petrol filling stations.

Tesco said its lowest petrol price was now 82.9p a litre.

Retailers have been able to cut forecourt costs after a sharp slump in the price of oil. New York-traded crude hit a record $147.27 a barrel on July 11, driven by speculation that soaring growth in emerging economies, such as China and India, would boost demand for crude. Prices also rose 57% in 2007 to $95.98 a barrel.

However, prices went into reverse in the second half of 2008 as the global economic crisis impacted on consumer spending and industrial production.

The New York price fell to its lowest in almost five years at $33.87 earlier this month, although fears this week that the conflict between Israel and Hamas in Gaza could heighten tension in the oil-rich Middle East bolstered prices towards $40 a barrel.

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