War and weather set to send prices soaring at pumps

Motorists face another huge rise in petrol and diesel prices.

There were predictions of a return to the record prices paid at the pumps last month when diesel peaked at an average of £1.33 a litre and petrol £1.19.

A series of events worldwide could herald another round of escalating fuel prices in the autumn.

They include war in Georgia threatening Western supplies through the BTC pipeline, America stockpiling for the winter and the pending hurricane season in the Caribbean which affects production at numerous oil platforms in the Gulf of Mexico.

The warning over pump prices comes 24 hours after rail commuters were told they face increases of up to 10 per cent in the cost of tickets from January.

Petrol and diesel prices have now come down to an average of £1.14 a litre for unleaded and £1.26 for diesel but the market is notoriously unsteady.

Paul Watters, director of the AA Motoring Trust, said: "The capacity of violence around the world to affect fuel prices is quite enormous - the first effect of violence is oil prices. I think prices will go back up again."

He said motorists should be ready to start paying more again around mid to late September. He added: "The hurricane-season in the Caribbean can have an effect on oil platforms through the Gulf of Mexico. The US, at that time of the year, also starts to stockpile fuel for the winter and this time we have the added problems in Georgia which carries the BTC pipeline."

Predictions of a bad winter add to the demand for domestic oil, which again increases cost. Although pump prices have been gradually falling back from their peak, this has only been in points of a penny while the wholesale price of petrol has fallen by 18 per cent and diesel by 22 per cent.

Mr Watters said: "Prices need to come down by another 3p a litre to reflect that." He called-on the fuel retailers to "follow the lead of the supermarkets - which have been cutting prices - to cut pennies not points off the price."

A survey conducted by the AA among 40,000 people showed that last month's record pump prices had pushed an increasing number of people out of the car and onto the train.

In April 37 per cent of those questioned said they would use the train - this has now increased to 57 per cent.

HGV drivers have already staged a series of demonstrations using their vehicles to bring parts of London to a halt in protest over escalating prices.

Geoff Dossiter of the Freight Transport Association said although the Government was not able to control world events it could reduce the price of fuel if it wanted.

He said: "We have a ludicrously high rate of fuel duty. Our members pay 50p per litre on duty but across the rest of the EU it is 25p."