A PETROL station owner in Worcestershire is the first in the country to slash unleaded to under £1 a litre, bringing smiles to the faces of his customers.

Independent garage owner Velautham Sarveswaran who has four garages has reduced the price of unleaded to 99.7p per litre for unleaded (and 109.7p for diesel) at all four of his garages, including the one in Alcester Road, Redditch. The other garages are in Walsall, Maypole in Birmingham and Swindon.

Mr Sarveswaran, who buys the fuel from Harvest but determines the prices himself, believes he has the cheapest unleaded in the country and was the first to break the £1 per litre barrier. His deals put pressure on other garages and supermarkets to cut prices at the pumps elsewhere in Worcestershire, including Worcester.

The 52-year-old, also the chairman of a charity helping people in his native Sri Lanka, runs the business with his wife Ananthi.

He said: "We have had an overwhelming reaction from customers. They're praising me and seem very happy. Supermarkets could do a bit more. It is an important milestone. We are very happy because of the praise and the happiness of customers. It makes us feel happy as well. It is not just about the money. It is very important to see smiles on faces rather than getting abuse from the customers for being too expensive. We're not making any money on petrol but in the long term it may pay off financially. We have more than doubled our volume of fuel sales."

Mr Sarveswaran is also chairman of the Assist Resettlement & Renaissance (Assist RR), an independent organisation which was formed in 2012 to relieve the poverty of war victims in Sri Lanka by assisting and enhancing their livelihood.

He said of his fuel prices: "I believe I'm the cheapest in the country." The cheapest prices for unleaded in Worcester according to the Petrol Prices website are to be found at Sainsbury's in Blackpole and the two main Tesco stores in Warndon Villages and St Peter's. All three supermarkets were charging 105.9p per litre this week. The cheapest garages for diesel are Mrh in Blackpole, Worcester and Sainsbury's also in Blackpole at 113.9p.

Average petrol prices have dipped to their lowest level for five years, according to the AA.

The AA said the average UK petrol price is 108.91p - a 7.41p dip on the mid-December figure and only 0.5p short of the second-biggest monthly fall recorded by the AA.

Average mid-January diesel prices are 116.11p a litre, which represents a 6.05p cut on the mid-December figure.

These average figures do not take into account the latest 2p-a-litre reduction in petrol and in diesel by the four big supermarkets.

The AA said a family with two petrol cars is spending around £16.30 a month less at the pump than in mid-December, and more than £50 a month less than last July, when petrol was at 131.70p a litre.

The cost of filling a Transit-type van (80-litre tank) fell £4.84 this month, and is £16.21 cheaper to refuel than in July when diesel hit its summer high of 136.37p.

Drivers in south west England, Yorkshire and Humberside, the north of England and Northern Ireland are enjoying the lowest petrol prices, all averaging 108.8p a litre. East Anglia has the most expensive, at 109.4p a litre.