Fuel increases as serious as 1970s oil shock, says Brown

As fuel protesters prepared to mount a wave of demonstrations across Britain this week, the Chancellor said he sympathised with hauliers and motorists on low incomes who had been hit by steep fuel cost increases.

Lorry drivers planning to hold up traffic with slow-moving motorway convoys called on the Government to take immediate action. But Mr Brown said he would not intervene to prevent the price of petrol rising further - although he hinted that petrol duty, which has already been frozen, would not increase in his mini-budget later this year.

The Chancellor said Hurricane Katrina had exacerbated the crisis, but he thought a slump could be averted by maintaining stability in the economy.

"I am aware of the challenge the hauliers face, I am aware, particularly, of the problems low-income families face with petrol prices rising," Mr Brown said on BBC Television's Sunday AM. "The public do understand that stability is all-important here and what we need to do is deal with an oil shock which is as big as the oil shock of the 1970s in terms of its effect on the economy."

Mr Brown has been talking to leading oil producers, including Saudi Arabia, to try to persuade them to increase production. The Government fears a repeat of the chaos of 2000, when fuel supplies were cut off, motorways were blocked and there were huge queues for petrol.

Contingency plans have been drawn up by the Department of Trade and Industry for rationing at petrol stations if supplies are blocked by lorry drivers over a long period.

Andrew Spence, spokesman for the Fuel Lobby, said: "We want peaceful protests. We are going to maintain a presence, but we will not be stopping supplies going in or going out. It should not be disruptive. I can't say strenuously enough that people should not be panic-buying."

Prices of standard unleaded petrol have reached up to £1 a litre with the average price rising from 80.2p a year ago to 97p.

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