DRIVERS filling up with unleaded at Morrisons' Malvern petrol station this morning enjoyed an early Christmas present as prices were cut to below £1 a litre.

The supermarket giant has reduced its unleaded petrol price to no more than 99.9p per litre, making it the first retailer to bring its price below £1 since June 2009.

Earlier this week the RAC, predicted that prices would move below £1-a-litre before the Christmas getaway.

But with the oil price tumbling, Morrisons is making the cut a fortnight earlier than expected.

And from midday Tesco - which has two petrol stations in Worcester - is also set to drop the price of unleaded petrol at all 500 of its petrol filling stations to 99.9p, along with a penny reduction in the price of diesel.

Meanwhile Asda is running a weekend-long reduction in the price of unleaded at 99.7p a litre.

Bryan Burger, Morrisons petrol retail director, said: "Today, for the first time in more than six years, we are moving unleaded prices down to below £1-a-litre.

"This is a moment where motorists will feel some relief after being clobbered by tax and price rises for the last decade.

"From the petrol price peak four years ago, the average car driver will have saved £17-a-week* which they can now spend on more enjoyable things than filling up their car."

Peter Cattell, fuel director for Tesco, said: "We want to do all we can to help our customers in the run-up to Christmas. We know that our customers really value low fuel prices and that having unleaded for 99.9p a litre will really give customers a boost over the festive period.

"These reductions will mean millions of customers save money by shopping at Tesco this Christmas."

Tesco will continue to review the price of unleaded petrol subject to changes in oil markets and foreign exchange movements.

RAC Fuel Watch spokesman Simon Williams said: "This is just the news motorists were expecting to hear after we reported this week that wholesale fuel prices were coming down again as the price of a barrel of oil fell below $40.

"Morrisons has delivered this festive saving at their pumps even sooner than we thought and no doubt their forecourts are now going to be very busy with motorists filling up with petrol at an everyday price of under £1 a litre."

Morrisons is also cutting 1p off a litre of its diesel from tomorrow morning.

Morrisons will hold the price at this new everyday price for as long as possible but it remains subject to changes in oil markets and foreign exchange movements.