The price cut reflects further recent falls in the oil price, which is around its lowest for 11 years. The UK’s benchmark oil product, Brent crude, is currently trading at just below $38 (£26) per barrel, having lost 35% over the year.
Asda, which has 277 filling stations, says it was the first to cut the price of petrol to below £1 a litre in November.
Peter Cattell, fuel director for Tesco, which has 500 filling stations, said, “Having diesel for 99.7p a litre will give our customers a big helping hand for the new year. This reduction will mean millions of customers save money by shopping at Tesco.”
Tesco will continue to review the price of diesel subject to changes in oil markets and foreign exchange movements.