Petrol prices rise amid fears of war in the Middle East

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The Independent Online

The cost of petrol rose by up to 2p per litre yesterday as oil companies and supermarkets increased prices in what some observers said was a response to growing tension in the Middle East.

Shell put up its recommended minimum price for unleaded petrol by 1p to 70.9p per litre while Esso increased prices by between 1p and 2p at some of its cheaper filling stations around the country, taking its typical forecourt price to between 70.9p and 71.9p.

Tesco also increased the cost of fuel 1p, taking its average to 70.7p per litre. Its move was matched by its rival Sainsbury's, whose average price is now one-tenth of a penny lower at 70.6p.

A Shell spokeswoman said "very poor margins" had resulted from competitive pricing and forced the company to act. Shell's move will affect several hundred of its sites and Tesco's increase will take effect at 300 of its forecourts.

Esso said the price rise generally affected only petrol stations that were previously charging lower rates – between 69p and 70p per litre.

Tesco said the "dramatic" increases in world oil prices over the last two weeks had made the change necessary. But the company stressed the price rise would only apply to unleaded petrol.

A spokesman for Sainsbury's said: "Due to rises in the price of crude oil over the last few weeks we have been forced to follow other major petrol retailers and supermarkets by raising the price of unleaded fuel by a penny per litre."

Edmund King, executive director of the RAC Foundation, said the possibility of war in Iraq was behind the current increase in world oil prices. "If [military] action starts, there will be a more rapid increase in fuel prices," he added.

Mr King warned that further increases could cause a repeat of the fuel protests of 2000.

But Jonathan Akerman, of the Retail Motor Industry Federation, said the rises were the delayed result of the Opec cartel of oil-exporting countries cutting production to boost world crude prices.

The AA said the price hikes by UK retailers were "inevitable" but warned that motorists would not accept further fuel tax increases in the Budget.