Higher costs at the pumps are driving motorists off the roads

Drivers are starting to cut back on the amount of fuel they use because of the soaring cost of petrol.

With the price of a litre of unleaded standing at a record 117p, "British motorists are clearly driving less," according to the International Energy Agency.

It said filling stations sold an average of 350 million barrels a day in March compared with 445 million a year ago, a 20 per cent fall.

Meanwhile a survey found that one in six commuters said the cost of driving to work had made them consider quitting their job and looking for work closer to home. The research, by insurance comparison website insurance.co.uk, found that the average commuter had seen fuel bills rise 21 per cent over the past year.

Today last-ditch talks to prevent "inevitable" petrol shortages this weekend were being held between unions representing Shell tanker drivers and their employers.

More than 500 drivers are threatening to go on strike for four days from Friday morning over pay demands.

The action would affect around one in 10 of the country's 9,500 filling stations. The Government warned that shortages at some stations would be unavoidable but urged drivers not to panic-buy.

The dispute comes as one of the world's most powerful oil company bosses warned that the oil price could double again "in the foreseeable future" to $250 a barrel, pushing the average price of a litre of petrol in Britain close to £2.

The Shell delivery drivers are employed by two haulage companies, Hoyer UK and Suckling Transport. Their union, Unite, claims that basic pay rates of around £32,000 have not increased since 1992.

There are fears that if the talks - at an undisclosed location - break down the dispute could spread to other companies, bringing about more widespread petrol shortages.

It would complete an extraordinary seven days in the energy markets, which started with the biggest-ever one-day spike in the oil price to just under $140 a barrel. In a speech in France yesterday Alexey Miller, head of the Russian gas giant Gazprom, went beyond even the most pessimistic City forecasts with his prediction of a $250-a-barrel price driven by rising demand.

Diesel prices hit a new record high of 130.33p a litre yesterday and petrol reached 116.9p a litre. The AA said the cost of filling the 50-litre tank of a Ford Mondeo-sized car had risen in a year by £9.93 for petrol and £16.45 for diesel.

Household fuel bills could soar further because the Government has backed off its demands to liberalise Europe's energy market, the Tories warned today.

Shadow Business Secretary Alan Duncan hit out after it emerged ministers had toned down the UK's bid to break up the nationalised EU gas and electricity industries. Mr Duncan described it as "the most abysmal and costly concession imaginable".