To take effect from tomorrow morning, the reduction will take petrol down to 120.7p per litre, with diesel dipping to 124.7p.
The move reflects the continuing fall in international oil prices, with Asda saying its fuel will be at its lowest since December 2010.
Asda’s petrol trading director Andy Peake said: “We have led and will continue to lead on these price cuts as we know how important it is that we pass savings straight back into drivers’ pockets as soon as prices fall.”
The AA’s head of roads policy Paul Watters said: “Asda’s latest price move is a timely boost for UK families as they see fuel consumption go up with the start of winter driving and the heating being switched on at home.”
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RAC fuel spokesman Simon Williams said: “This is not an unexpected cut as there is plenty of margin between wholesale and retail costs for prices to go lower still. Oil continues to be pumped way above global demand which combined with a strong pound which is good news for motorists.”