Supermarket Asda have cut petrol prices by up to 2p per litre after a fall in wholesale costs.
The reduction in its national price cap means drivers will pay no more than £1.27 at its filling stations.
Diesel remains unchanged as "wholesale costs haven't moved", an Asda spokeswoman said.
Average UK fuel prices have spiralled in recent weeks, reaching £1.31 per litre of petrol and £1.35 for diesel.
The last time fuel was more expensive was July 2014.
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.
Government data published on Tuesday showed that for the first time in three months there was no weekly increase in the price of petrol, while the rise in diesel slowed to just 0.2p per litre.
Asda's senior fuel buyer Dave Tyrer said: "Today's latest move shows that Asda is once again cutting the cost of filling up for motorists following a decrease in the wholesale costs on unleaded.
"Our new national price cap of 126.7p per litre will be welcomed by the millions of drivers across the UK who have seen prices rise by 10p per litre since the start of summer and are currently at their highest for five years."
RAC fuel spokesman Simon Williams said: "Drivers will be relieved to see a major supermarket cut the price of petrol after weeks of rising prices.
"The wholesale price of petrol has been falling since the start of September so it's right that retailers pass on the saving to motorists at the pumps, even if it is a little late.
"However, while this is clearly good news there is a black cloud looming over UK forecourts as yesterday a barrel of oil hit 82 US dollars - a price not seen since November 2014.
"On top of this it is being predicted oil could rise towards 90 US dollars which without a strengthening of the pound could spell much higher prices at the pumps."
AA fuel price spokesman Luke Bosdet said: "Once again, Asda has to take the lead in passing on fuel savings to drivers.
"Last weekend, despite three weeks of falling wholesale costs, the pump price of petrol hardly budged below the four-year highs that families and businesses have had to endure."