Petrol prices to hit £1.50 a litre this summer, OPEC chief warns

Motorists are being warned that prices at the petrol pumps could be heading towards £1.50 a litre this summer.

Chakib Khelil, president of the Organisation of Petroleum Exporting Countries, said that the cost of crude oil could soar by up to 25 per cent in the coming weeks to between $150 and $170 a barrel.

This would push the price of diesel on Britain's forecourts from around £1.33 a litre to an unprecedented £1.47.

Unleaded petrol would rise from its current level of £1.18 to as much as £1.32.

It means motorists could typically have to pay more than £70 to fill their tanks.

The average car's petrol tank holds 55 litres of fuel so the cost of filling it with petrol could rise to £72.60  -  with a diesel car the cost would be more than £80.

Motoring groups last night reacted with alarm, saying the government must act to alleviate the pain on families and businesses.

Edmund King, president of the AA, said Chancellor Alistair Darling should immediately scrap plans to add 2p a litre to fuel duty in October.

He said a recent survey for the AA showed that two-thirds of drivers would vote for a different government if the price of petrol or diesel hits £1.49.

The Exchequer may have already scooped an additional £1.1billion from petrol taxes since the March Budget, thanks to the surging oil prices, said accountants Grant Thornton earlier this month.

Mr King said: 'This oil price problem does not appear to be a short term blip. It appears to be a longterm nightmare for motorists.

'This has to be very worrying for the Government. It must immediately announce it has no intention of going ahead with the 2p increase.

He added: 'Financial markets expect the price of oil to remain pretty high.

'Things are not looking good for motorists. We are already seeing them driving more slowly and cutting back on journeys.

'But for many people dependent on their cars, they have little choice. They just have to pay the money.'

Compared to this time last year, diesel is now 34.76p per litre more expensive. The cost of petrol has risen 21.72p per litre.

Neil Greig, director of the IAM Motoring Trust, said: 'This is more bad news for motorists. There seems to be no controlling the price of oil.

'If we are feeling the pain now, it is going to get much worse.'

Mr Greig added: 'Those of us who bought diesel cars to be environmentally friendly are suffering. We probably paid more for the car in first place, and now we are paying more for the fuel.'

OPEC chief Chakib Kheilil has warned that petrol prices are set to rise even further

Crude oil prices shot above $140 a barrel last night after hearing Mr Khelil's forecast and a declaration by Libya that it may cut oil production.

Mr Khelil said that while he hopes the oil price spike will ease back later in the year, there is a chance that a major market crisis, such as a halt to Iranian production, could even force prices above $200.

Opec nations led by Saudi Arabia blame speculators in Wall Street and the City of London for driving up oil prices, insisting that they are already pumping more than enough oil to meet demand.

Mr Khelil re-iterated this argument yesterday. He told France 24 television: 'I forecast prices probably between $150-$170 during this summer. That will perhaps ease towards the end of the year.

'The problem is the extent of that speculation on the market.' There was further gloom last night as Wall Street tumbled more than 300 points to a 21-month low, after Wall Street powerhouse Goldman Sachs urged investors to sell bank and car company shares.

Yesterday Bank of England governor Mervyn King warned that further gains in the price of oil could feed into inflation, forcing him to raise interest rates.

He said families have to accept that the soaring cost of energy and food will squeeze their incomes. 'This year the impact of rising energy and food prices will mean we altogether as a country will see a pause in the growth of our living standards,' Mr King told a committee of MPs.