Asda announced on Friday it would cut the price of petrol by 3p per litre and diesel by 2p per litre.
Customers will pay to 103.9 pence per litre for unleaded petrol and 105.9p per litre for Diesel fuel at all its forecourts.
Tesco has matched Asda’s 3p per litre price cut.
Asda says the price cuts will save its customers an average £2.75 when filling up a 55 litre tank, compared to average pump prices of 108.99p per litre for petrol and 110.26p per litre for diesel.
David Miles, Asda’s commercial director, says: “With Christmas just around the corner, it’s a time when cash is tight and we want to help our customers make it go further”.
“With this early Christmas present, we’re putting money back in our customers’ pockets wherever they fill up by moving quickly to pass the saving on as our costs fall.”
The move follows a call from the AA for the price of petrol to be cut by 1p at the pump.
The pre-Christmas price wars have been more heated this year than in previous years with supermarkets ramping up tier promotions to win customers in the festive season.