New fear of petrol price rise at pumps

Just as Britain started to refuel after days of shortages, the price of crude oil increased again yesterday, leading to deep concern that further petrol price rises could be imminent.

Just as Britain started to refuel after days of shortages, the price of crude oil increased again yesterday, leading to deep concern that further petrol price rises could be imminent.

The rise, of $1.50 a barrel to $33.79, has already caused three leading airlines to announced a rise in their fares because of higher fuel costs. British Airways and Virgin said their increase was 3 per cent and the Dutch carrier KLM said its prices would be raised by 4 per cent.

Convoys of tankers are restocking Britain's 12,500 petrol stations, transport experts predicting 25 per cent of them would be ready for business this morning, though queues were likely beyond the weekend in many areas. Some stations are rationing customers to £10 of fuel each.

The Petrol Retailers Association spokesman, Ray Holloway, said: "The oil companies cannot do more. But the scale of the problem is enormous, with 11,000 out of 14,000 petrol stations empty. As soon as one station is refuelled it's emptied again by desperate motorists."

The Institute of Directors estimates the dispute has cost businesses £1bn, about £40 per household nationally.

Protesters who brought Britain to a halt have warned the Government it has just 60 days to do something to reduce the cost of fuel, most likely through a reduction in tax, the highest in Europe. Yesterday, the Home Secretary, Jack Straw, chaired the first meeting of the taskforce set up to prevent a repeat of this week's events. Chris Gibson-Smith, the managing director of BP who was appointed to the group, said he had "no suggestions" to make. He added: "I haven't thought about it."

Earlier Mr Straw had admitted the Government had been caught out by the pace and widespread support of the demonstrations. "If you are saying did we anticipate the scale and speed with which developments occurred, no, we didn't," he told the BBC. "Neither did anybody else. This has turned out to be new phenomenon in protest. These things happen in Government from time to time."

He said the government was right not to give into the demands for a cut in fuel tax. "We either went the French way or we did what people expected of a serious and responsible British Government ... on the issue of protests which had passed an acceptable democratic line."

Ministry of Defence tankers are on stand-by to give Army fuel to the emergency services in case of shortages. They have already helped the emergency services in Gwent and the fire service in Staffordshire.

The Conservative leader, William Hague, said a future Tory administration would consider petrol a "strong candidate" for tax cuts.

Yesterday, a GMB union survey revealed oil company bosses last year had pay rises of up to 65 per cent. The general secretary, John Edmonds, said: "It is a scandal. This exposes the insatiable greed of the oil-guzzling gluttons."