A TRADE war between supermarket forecourts and oil companies could slash fleet managers' fuel costs by millions of pounds a year. A fall in the price of crude oil prompted supermarket chains Tesco, Sainsbury's, Asda and Safeway to slash prices by an average of 2p a litre/9p a gallon.

The major oil producers did not follow the supermarkets' lead for at least 48 hours until Shell, on Friday, cut pump prices by a similar amount on diesel, leaded petrol and super unleaded petrol but held the price of ordinary unleaded firm. A barrel of oil is now trading at just over £19, compared with more than £24 at the height of the fuel crisis.

Ray Holloway, director of Petrol Retailers' Association, said unprecedented falling prices in petrol and diesel since the fuel crisis would help fleet managers reduce their operating costs.

'We are witnessing a pre-Christmas trading war between the supermarkets,' he said. 'They are taking advantage of the dramatic fall in crude oil prices and are determined to sell as much petrol as possible during the Christmas season to recover the losses they made during the fuel crisis. This trading war can only benefit fleet managers.'

Meanwhile, oil companies have been left on the defensive as pressure to follow suit on their own forecourts has intensified both from Government and the public.