Petrol prices start to soar

Motorists are facing a summer of petrol price rises after the cost of oil surged to a record high today.

The first increase at the pumps, sending a litre of unleaded petrol up by 1p and diesel by 2p, could come before the weekend is out.

Motoring organisations said the rise would push the average cost of unleaded petrol to 82.3p a litre.

The cost of crude oil surged to 43.17 dollars (?23.70) a barrel in New York, the highest level since trading began on the exchange 21 years ago. London-traded Brent hit a 14-year high of $39.76 a barrel.

"The cost of crude in New York is the barometer everybody watches. If that is going up then motorists had better expect a rise too," said Edmund King of the RAC Foundation.

A spokesman for the AA added: "We expect a rise in the cost of petrol very soon." Ray Holloway, director of the Petrol Retailers' Association said: "We expect this pressure on prices will continue throughout August."

Analyst Kevin Norrish of Barclays Capital said a peak of $50 dollars a barrel could not be ruled out. "The stage is set for prices to continue to move higher. It's difficult to see what can stop that other than a sharp fall in demand," he said.

The oil price rise comes amid fears over a stand-off between Russian authorities and its largest oil company, Yukos. There has also been a slowdown in output from Iraq where oil installations are a target for bombers.