The average price of unleaded petrol in Britain has hit a four-year high of 81p a litre.
Rising crude prices have pushed up prices at the petrol pump
Threats to oil supplies in Iraq and Russia and tensions in the Middle East are causing oil prices to rise.
The effect has pushed crude oil prices to 13-year highs, having risen by over 20% this year alone.
Crude oil has now risen to over $44 a barrel. Oil prices last hit record highs of $41-a-barrel at the onset of the first Gulf War in 1990.
Crude oil prices "will average above $40 a barrel for 2004 as a whole," said Paul Horsnell, head of energy research at Barclays Capital in London.
He said there was strong possibility of "a run up to and perhaps beyond $50 this year", but thought such levels would "not be sustained for very long".
"If the oil price hardens this week and remains high, there will be some effect on UK pumps prices by the end of the week," said Stephen Brooks, an analyst at oil consultancy Wood Mckenzie.
The petrol situation in Britain will be exacerbated later this year.
Taxes on fuel were due to rise by about 1.9p a litre in September - in keeping with announcements from the March budget.
But the government has already postponed this increase in fuel duty - in fear of nationwide protests - and are expected to review it in November.
Truckers hardest hit
British drivers claim they are the most highly taxed in Europe. Truckers are particularly militant over this, as fuel accounts for over a third of haulage costs.
"There is rumbling in the industry and great concern about the cost of crude," said Paul Newton of the haulage firm Horley Motors Ltd.
Prime minister Tony Blair has said he is willing to put pressure on oil producers' cartel Opec to act to bring down prices.
But prices have not yet peaked at the high of 85.32p recorded in mid-June 2000 - which sparked fuel protests in September of the same year.
Economists also point out that, adjusted for inflation, oil prices are still lower than during the first Gulf War, and less than half the levels seen during the oil crisis of the early 1970s.