Gas prices are set to become the next weapon in the U.K.'s supermarket price war as the country's biggest retailers attempt to lure customers with lower prices in the run-up to the key Black Friday and Christmas shopping seasons.
Morrissons (MRWSY) , one of the country's 'Big Four' supermarkets, will cut the price of fuel to below £1 a liter ($1.23) for customers spending more than £50 in store.
Britons pay some of the highest prices in the word for gasoline, with the U.K. national average as of November 19 at 114.80 pence per liter, a figure that translates to $5.35 per gallon, more than two and a half times the current U.S. national average of $2.143.
Furthermore, fuel prices have risen since the U.K. voted to leave the European Union, hitting their highest point since July of last year as the pound fell more 19% against the U.S dollar - the currency in which global crude oil is priced.
Morrisons, which has 333 locations with petrol stations across Britain, said the move will be a big to help drivers with the "cost of getting around during the pre-Christmas shopping spree, including Black Friday." The offer will take place between November 21 to December 3 and should save customers £5 every time they fill their car.
The Bradford, England-based supermarket last week announced it was reducing the price of unleaded gas to a maximum of 109.9 pence a liter.
Asda said it would put a market cap of 110.7 pence a liter in place at its 294 filling stations and Tesco said it was cutting fuel by 3 pence a liter.
"With the busy festive season just around the corner, we know many of our customers will be starting to prepare for the big day," Tesco's fuel director Peter Cattell said in a statement. "So to provide a little extra help we're cutting the cost of petrol and diesel by up to three pence per liter at all of our 500 filling stations."
U.K. supermarkets are entangled in a fierce price war as low-cost competitors enter the market but inflationary pressure continues due to the fall in the pound could kill this strategy.
The current fuel battle follows a price war on milk last year, which saw 4 pints of milk, about 2.5 quarts, sell for 89 pence. Dairy farmers at the time said that the price cuts would threaten their livelihood.
Morrisons shares fell 0.14% by 10:25 GMT to change hands at at 217.7 pence each, compared to a 1.15% decline for Sainbury's and a 0.09% slip for Tesco.
Morrisons, the country's fourth biggest supermarket with about 11% market share, is in a bid to become more competitive. Last week it announced a further tie up with Amazon (AMZN) - Get Report to start one hour delivery of a full grocery order to Amazon Prime customers.
The supermarkets underlying performance has been improving, it reported a fourth consecutive quarter of same-store sales grow on lower prices and good Halloween trading.
It has previously come under pressure from activist investor Elliott Management that called for Morrisons to sell off its property holdings.