Petrol prices hit another record high

Petrol prices have hit another record, according to industry analysts Experian Catalist.

The average price of a litre of unleaded petrol hit 140.20 pence.

Higher oil prices, driven by concerns about Iran, have been behind the rising price of fuel. Crude oil prices have risen 12% since January.

Chancellor Osborne confirmed this week that a 3p per litre fuel duty rise will take effect on 1 August, drawing criticism from the motoring industry.

The RAC said petrol prices had hit "another painful barrier".

"A figure of £1.40 a litre is a massive price for people to have to pay and there is no end in sight to rising prices," said RAC technical director David Bizley.

"The way things are going the planned duty rise will see average petrol prices hit the £1.50-a-litre mark - forcing more and more people who need their cars off the road."

The motor industry and Labour have been calling for the August rise in duty to be cancelled.

"It shows just how out of touch George Osborne is that, in this week's Budget, he said he could afford to give a huge tax cut to people earning over £150,000, but couldn't afford to cut fuel duty for middle and low-income families feeling the squeeze," said Labour's Treasury spokesperson Cathy Jamieson.

It is the last planned rise under the annual fuel tax escalator, which the chancellor has now scrapped.

Under the escalator scheme, introduced in 2009, fuel duty had been scheduled to rise by inflation plus 1p every year.

Mr Osborne has pledged that fuel duty will not in future rise faster than inflation, unless oil prices were to fall below £45 a barrel under what is known as the fair fuel stabiliser.

Brent crude was trading at almost $124 (£78) a barrel on Friday.

Responding to questions about high fuel prices from small businesses at a conference in Scarborough, Business Secretary Vince Cable said reducing fuel prices would be too costly.

"The dilemma the government has got is this: there's an oil price shock taking place at the moment because of what is happening in the Middle East, the problems around Iran.

"We could stop all of it but it's extremely expensive, we're trying to manage the budget down, we've got to strike a reasonable balance."

Mark Stockwood, the Federation of Small Businesses' national councillor for Cornwall, said fuel prices were hurting its members.

"I share everyone's anger about fuel prices," he said. "You only have to look at the roads - there are less vehicles these days."

Middle East tensions

The Bank of England expects inflation to slow this year, which will ease the squeeze on consumers.

But it has expressed concern about the potential impact of further oil price rises.

"Any worsening of the underlying tensions in the Middle East could have significant implications for future oil prices," the Bank's Monetary Policy Committee said in the minutes of its latest meeting to set interest rates.

It suggested that prices might keep rising.

"With an underlying upward trend in global demand, the risks might be more to the upside," it added.

The average price of a litre of diesel is 146.72p. Super unleaded is now 147.40p per litre on average, Experian Catalist said.