ASDA has sparked a fuel price war after it reduced its petrol prices by up to 2p per litre.

The move came after fuel retailers were accused of not passing on savings from lower wholesale costs.

The supermarket said its new national fuel cap means drivers will pay no more than 122.7p per litre at its 319 filling stations, including Wheatley and Carterton.

It is Asda's second petrol price reduction in less than two weeks after it reduced its cap by 3p per litre on October 26.

Asda's senior fuel buyer, Dave Tyrer, said: "Our new national price cap of 122.7p per litre will be welcomed by the millions of drivers across the UK.

"Further decreases in the wholesale market mean we are able to reduce our prices again, seeing our unleaded price dropped by up to 5p per litre in just under two weeks.

Both petrol and diesel prices have reached a four-year high in recent months.

Over the past six months the cost of filling up a typical 55-litre family car that runs on petrol or diesel has risen by around £6.

The RAC said drivers should "feel aggrieved" after average petrol prices remained virtually unchanged last month despite a fall in wholesale costs.

It claimed the biggest retailers who sell the most fuel have "taken drivers for a ride".

AA fuel spokesman Luke Bosdet said: "With 4p knocked off the wholesale price of a litre of petrol through October, the AA has watched with dismay as average pump prices have trickled down by barely a penny.

"Some supermarkets have chosen to pass on the savings as money-off offers - but only if you spent £60 or so in store.

"Asda, as usual, will break the log-jam by cutting prices for all drivers and forcing other forecourts locally to follow suit.

"Sadly, beyond those areas, the pump prices will stay high as other retailers choose to hang on to the savings they should be passing on to hard-pressed consumers."