Motorists face hit from rising oil price

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Car drivers look likely to be hit by an increase in petrol costs because of soaring oil prices, just days after Gordon Brown attempted to placate the motoring lobby by delaying the rise in fuel duty.

Car drivers look likely to be hit by an increase in petrol costs because of soaring oil prices, just days after Gordon Brown attempted to placate the motoring lobby by delaying the rise in fuel duty.

The price of crude oil hit a fresh all-time high on both sides of the Atlantic yesterday, breaking through the $57 (£29.60) a barrel price in New York.

Motoring groups warned it was only a matter time before petrol retailers put up their prices. Kevin Delaney, head of traffic for the RAC Foundation, said any increase in the crude oil price would eventually feed through to pump prices.

"I think it will almost certainly happen," he said. "The question is not whether but when, and I am sure that as we speak all the petrol companies are working out how long they can wait before one of them cracks and puts up prices."

The AA said the average price of a litre of unleaded petrol had reached 80.5p, while diesel cost 84.9p a litre. The average price in the competitive supermarket petrol market had hit 79.3p a litre.

Paul Watters, its head of transport policy, warned that a rise in the average supermarket price of unleaded above 80p a litre would risk a repetition of the public anger that led to the fuel protests in 2000. "Gordon Brown has shown he can help by delaying rises, but we still need fuel duty to be lower," he said.

On Wednesday, the Chancellor announced that for the third successive Budget, he would delay the imposition of the inflation-linked rise in fuel duty to 1 September because of "sustained volatility in the oil market".

Opec, the oil producers' cartel, raised hopes yesterday of a second increase in output.

But with output near a 25-year high, Opec is stretched to meet rising demand, encouraging hedge funds to bet that oil's bull run can go further.

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