PETROL below £1 a litre returned today when supermarkets Asda and Morrisons dropped the price of unleaded to 99.9p.

The cut means a 5p a litre reduction in the price of petrol at Asda pumps, with a litre of diesel falling from 116.9p to 110.9p.

This is the first time since last December that petrol has been under £1 in the UK, with unleaded going over 120p a litre and diesel over 130p during the worst of this year's price rises.

Supermarket Morrisons said later it had reduced its petrol to 99.9p a litre and cut the price of diesel to 111.9p a litre.

Oil prices slid to their lowest level for nearly 14 months today amid concerns that the world economy is heading for a major slowdown.

Light, sweet crude for November delivery on the New York Mercantile Exchange (Nymex) was trading more than three dollars lower at 75.10 US dollars a barrel.

Prices dipped as low as 74.97 US dollars at one point, the lowest since the start of September last year.

Damien Cox, senior analyst at energy adviser John Hall Associates, predicted further falls as the outlook for the worsening economies becomes clearer over the coming months.

He said: "With the economic situation looking the way it is, I don't think we have seen the bottom yet. There's still a little bit to come out of this over the next few months."

In September last year, unleaded cost an average 95.2p per litre, with diesel averaging at 96.9p.

Last week Tesco sparked a new round of price cuts after slashing prices by 3p a litre at its 430 forecourts.

Energy giant Total followed suit, with BP announcing it had reduced pump prices at its 300 company-owned stores by an average of 3p per litre and some sites by 5p per litre.

Today's fall in oil prices was reflected on the stock market, with shares in BP sliding nearly four per cent. Rival Royal Dutch Shell fell by the same amount.

Morrisons said its new prices would apply at all its 287 UK forecourts and that this was the sixth time it had cut petrol prices since July.

Morrisons chief executive Marc Bolland said: "This is strong support for the millions of motorists that are served at our forecourts. We're absolutely committed to delivering real value for all of our customers – whether they're shopping in our stores or filling up at our forecourts."

RAC motoring strategist Adrian Tink said: "Finally we have a bit of respite for Britain's hard pressed motorists. For the past year they have been paying over £1 a litre for petrol – a figure that went up to £1.19 in July. This has hit Britain's motorists hard in a tough economic climate, with the average motorist spending over £1,300 a year to fill their tank.

"At least that figure should start to come down now and motorists will see a significant difference in their wallet when they next visit the forecourt."

Mr Tink urged all retailers to follow with their own price cuts.

He went on: "At present there are often huge differences regionally, which can see anything up to 10p a litre extra being paid at the pumps. We are calling on all retailers across the country to get their petrol prices under the £1 barrier quickly to help Britain's beleaguered motorists."