Average diesel prices are likely to fall below unleaded petrol for the first time in 14 years, following a round of price cutting by supermarkets sparked by Morrisons.

It announced that it was cutting its diesel by 2ppl from Monday July 20, and that in most of its sites this would mean diesel prices were lower than petrol. Tesco then cut its diesel price by 2ppl on the Monday afternoon.

Sainsbury and Asda introduced 2ppl cuts for diesel on Tuesday. With Asda’s national pricing policy this meant diesel was no more than 112.7ppl across its estate of 336 fuel stations, while the price ceiling for unleaded petrol was 114.7ppl

Mark Todd, petrol director for Morrisons, said: “Because of the recent price drops in the wholesale diesel price, we are able to pass on these savings to our customers. This is a milestone in motoring and many younger drivers won’t remember the last time that diesel prices were lower than unleaded.

“While we are cutting diesel prices today, we will continue to look for opportunities to pass on savings on unleaded as soon as we can.”

He said the reduction in the diesel price is partly being caused by global economic factors such as weakness of demand in Europe and an increase in diesel refining capacity. “There will be a handful of Morrisons stations where diesel prices will remain higher than unleaded and this is because of local competitive factors.”

RAC fuel spokesman Simon Williams commented: “This latest price cut means we are now well on the way to seeing a UK fuel price flip – where the average price of diesel is, quite rightly, cheaper than unleaded at the pumps. This move should be the catalyst to bring the average price of diesel down from 118.98ppl to below unleaded’s current price of 117.24p per litre.

“RAC Fuel Watch records show diesel was last cheaper than petrol on 17 July 2001 so it’s great news for the 10.7 million diesel car drivers. When this happened last diesel was cheaper than petrol for two and a half months, but with a new supply of diesel being produced from Saudi Arabia there is a real chance that we may see the diesel price staying below petrol for some considerable time.”