Asda has dropped its fuel prices to absorb the government’s duty increase on petrol which comes into force today.

The retailer knocked 1p per litre off its fuel at the weekend and has since reduced it by a further 1.5p per.

From October 1, Asda will charge 73.2p per litre for unleaded petrol and 74.3p per litre for diesel.

Services director at Asda, Paul Mancey, said: "We have more than absorbed the fuel duty increase that many people will have to pay if they visit other petrol retailers."

Safeway also confirmed that petrol prices at its stores would not increase.

Chief executive of the Freight Transport Association, Richard Turner, said that the FTA had been campaigning against the increase in diesel duty for the last six months.

He said: "We have argued that an increase in October was still inappropriate because of the uncertain economic recovery and the continuing instability of world oil prices."

The FTA is still urging ministers to rethink their decision, he said.