Drivers filling up their tanks at Asda and Morrisons will see the price of petrol and diesel fall by around £1 per fill from today.
The price cuts follow four consecutive months of petrol price hikes, and are expected to start a supermarket price war with Tesco, Sainsbury's and Waitrose expected to follow suit and slash prices in the coming days.
The wholesale cost of fuel has fallen by around 2p a litre with the cost averaging 33.8 pence per litre (ppl) last week, compared to 35.5 ppl in mid-February.
Over Christmas drivers were hit by the highest fuel prices for two years meaning the cuts will come as a relief to many.
From today motorists will pay no more than 114.7ppl for unleaded and 116.7ppl for diesel at Asda's 301 filling stations.
The latest government figures show the average price of petrol in the UK is 120ppl, while diesel is 122.9ppl.
A 2p a litre petrol price reduction translates to a total saving of £1.10 when filling up an average 55 litre car.
Asda's head of petrol trading, Dave Tyrer, said: "Today's latest move shows that Asda is once again leading the way in reducing the price at the pumps to help the millions of motorists across the UK.
"Our new national price cap of 114.7ppl on unleaded and 116.7ppl on diesel will be welcomed by the millions of drivers who have seen fuel prices climb over the last 12 months."
Roger Fogg, Morrisons' services director, said: "We will always aim to drop prices as soon as we can and always keep them far below the UK average."
RAC fuel spokesman Simon Williams said: "This is the perfect spring gift for motorists to go with longer days and warmer weather. No doubt other retailers will follow suit and we will see prices on every forecourt come down.
"While this cut may come as a surprise to drivers as prices at the pump have been going the wrong way for months, it has been on the cards for a couple of weeks - we're very relieved retailers have acted without any need for outside encouragement."
The AA is now advising drivers to look out for non-supermarket independent retailers undercutting their superstore rivals.