YORK'S biggest independent petrol retailer has branded the decision by supermarket chain Asda to cut petrol prices by about 2p a litre as a "gimmick".

The company is introducing a nationwide price of 79.9p per litre for both unleaded and diesel at its 150 petrol stations.

Asda said the move was made possible because of the decision by oil producing countries last week to increase production to head off a global crisis.

But Graham Kennedy, managing director of Innerspace Stations, said Asda was only doing it to entice people into the shop. Fuel prices at his sites currently average 82.9 per litre for unleaded and diesel.

"This is just a gimmick," he said.

"Asda don't make any profits selling petrol at that price, but do it to get people inside the store where they make phenomenal profits. We're already competitively priced."

Elvington-based haulage firm, A1 Plant and Haulage, said the price change would make little difference as they bought diesel in bulk to fill up themselves. Manager Roy Handley called on the government to resist putting up fuel tax.

Paul Mancey, trading director at Asda, said: "The last to raise prices and the first to drop them - that's the simple promise we made to our petrol customers two years ago."

Latest figures from the AA show the average price for a litre of unleaded petrol across the UK is 82.77p, although supermarkets are about 1p a litre cheaper. The average price for diesel is 83.72p a litre, according to data collected last Tuesday.

In the York and Selby area the average price for a litre of unleaded and diesel currently stands at 85p.

Updated: 10:38 Thursday, June 10, 2004