Motorists fear petrol price rise

Fuel tax rises were postponed in April

A surge in crude oil prices days ahead of a possible increase in fuel duties has stirred fears that petrol prices may rise sharply

Benchmark Brent crude oil prices leapt by $1.23 to $26.75 a barrel on Wednesday after oil producers' cartel OPEC unexpectedly announced plans to cut their output from 1 November.

OPEC said the output cut was aimed at counteracting slacker than expected demand.

The spike in crude oil prices comes amid speculation that the government is poised to push through a delayed 5p per gallon increase in petrol taxes.

In his Budget in April, Chancellor Gordon Brown delayed the planned rise for six months because of the "high and volatile level of oil prices" caused by the Iraq war.

Rising costs

The six months is up at the end of this month and, with the end of official hostilities in Iraq, the 1.28p a litre price hike could be imposed on 1 October.

The Treasury refused to confirm that the planned tax increase will take effect, saying it would make an announcement before the start of next month.

But motorists' groups said drivers appeared certain to face an increase in the cost of filling up their tanks.

"Generally, supply of petrol exceeds demand at this time of year, but the OPEC production cut will put up prices," said Kevin Delaney, traffic and road safety manager at the RAC Foundation.

"America, for example, will buy more fuel than it needs to guarantee future supplies and this will lead to increased demand and an even bigger rise in pump prices."

According to fleet and fuel management company Arval, the average price of unleaded petrol currently stands at 76.57p, up from 74.6p in mid-July.