Fuel prices are set to fall below £1 a litre, the boss of Sainsbury’s has said, after the cost of crude oil fell further.
Mike Coupe, chief executive of the supermarket chain, made the prediction as Brent crude was being traded at below $50 a barrel for the first time since 2009.
The industry benchmark has slumped from $118 a barrel in June and Chancellor George Osborne has warned it is “vital” that deep cuts in global prices are passed on to consumers at petrol pumps, through utility bills and air fares.
Sainsbury’s is one of four supermarkets to reduce prices by 2p per litre on both petrol and diesel this week.
Asked if he saw fuel prices getting to a pound per litre any time soon, Mr Coupe told BBC Radio 5 Live: “If the oil price continues to fall, almost certainly. We have certainly seen prices chased down, mainly by the supermarkets.
“You could feasibly see fuel prices fall below the £1 barrier.”
The energy industry has insisted deep cuts in global prices were already being passed on to customers after Mr Osborne announced a review of the impact on items such as fuel bills, air fares and the forecourt price of petrol.
Ministers said concerned industries were being watched “like hawks” and officials were examining what action might be taken if the fall in the global oil price was not adequately reflected in what the public was charged.
AA spokesman Luke Bosdet said if Mr Coupe’s prediction was correct it would be the first time the £1-per-litre level had been breached since the autumn of 2008.
He said the battle for customers between supermarkets was creating “extremely competitive” pricing, with costs at some outlets in some areas pushing towards £1.
However, he added that drivers face a “postcode lottery” with average prices across the country still above 110p per litre.