Petrol prices up as oil soars

Petrol is going up again after world oil prices soared to record levels.

Supermarkets and oil companies began pushing up the cost of a litre of petrol as Brent crude raced to a record 56.00 dollars a barrel, up 1.12 dollars.

Sainsbury's said its prices had already gone up by as much as 3p a litre, adding £1.50 to a typical fill-up.

Motoring organisations warned drivers to be prepared for further increases.

An AA spokesman said: "We are sure that there are going to be more petrol price rises."

Average petrol prices at British forecourts rose by 0.7p last week to 82.1p a litre on Friday. Diesel was 0.9p dearer at 86.7p a litre.

Petrol pump prices have gone up from 77.8p a litre this time last year, a 5.5 per cent increase.

Diesel is 9.5 per cent up from a year ago, when it was being sold at 79.2p a litre.

A spokeswoman for Sainsbury's said: "Prices have gone up temporarily-There had been unexpected-cost increases so the prices had to go up."

However, she added that the supermarket chain planned to cut the prices by a minimum of 1p a litre tomorrow to remain competitive.

The latest increases, following several months of falling prices, come as traders pushed up the price of oil on the world markets.

A late-winter cold spell in America has driven up demand, while the strengthening dollar has made oil more expensive in sterling terms.

The high price prompted the Organisation of Petroleum Exporting Countries (Opec) to agree to boost production by half a million barrels today, an unusual move at this time of year when warmer weather should mean demand is starting to fall. Analysts warned that an oil price of 60 or even 70 dollars a barrel was now in sight as Opec's move did not impress the market.

Opec president Sheikh Ahmad al- Fahd al- Sabah said the exporters group might begin talks as early as next week over a second output rise if prices do not ease.

The petrol price increase comes the day after Chancellor Gordon Brown gave some relief to drivers by freezing fuel duty for six months because of " volatility" in world oil markets.

It would normally be expected to go up by 1.5p in line with inflation.

However, there will be anger that the renewed upward march of the cost of petrol comes only weeks after BP and Shell announced record combined profits of about £18billion.

It also emerged last week that BP boss Lord Browne earned more than £5 million last year.