Second fuel strike averted as Shell tanker drivers win inflation-busting pay rise

The deal, which is worth at least 14 per cent over two years, will take their average salaries to nearly £42,000 a year.

It is understood the increase will amount to almost nine per cent this year followed by five per cent in 2009.

More cash in the pipeline: Shell driver

The deal, which comes at a time when the Government is desperate to keep a lid on pay rises, has averted another four-day strike planned to start on Friday.

But the cost of the action to motorists is revealed in figures today showing that petrol and diesel prices have soared at their fastest ever rate to record highs over the past month.

The AA, which published the statistics, says that in many areas diesel now costs an average of £6 a gallon.

Now the costliest in Europe after Norway, diesel has gone up by a record 7.39p a litre  - more than 33p a gallon - in just four weeks and now costs an average of 131.56p a litre.

Petrol, meanwhile, has soared by a record 5.61p a litre - more than 25p a gallon -  over the same period.

It now costs an average 118.16p a litre, says the AA's monthly fuel report.

The strike by only 650 drivers led to fuel running out at hundreds of forecourts  - including half of Shell's - with some filling stations resorting to rationing and accusations of profiteering by some of them.

Protest: Tanker drivers outside a refinery in Cheshire during the four-day strike

The breakthrough came at the end of all-day talks between leaders of the Unite union and managers from the haulage firms Hoyer and Suckling Transport, which deliver fuel to Shell's filling stations.

Last Thursday the drivers rejected a deal worth 13 per cent over two years that the company said would have taken salaries to £41,500.

The details of last night's deal are still secret. It is certain to be an improvement on last Thursday's offer, although Unite says the £42,000 figure includes overtime.

The union had been seeking to win a pay rise to give drivers a basic salary of £36,000.

Following last night's meeting at its headquarters in London, Unite will today recommend the deal to its drivers.

Fears of a petrol shortage led to queues at forecourts around the country

They will now be balloted over the coming week, with a recommendation to accept.

In the meantime, all industrial action has been called off, including a ban on overtime.

While last night's deal was met with relief from motorists, the Government is likely to be very concerned.

Ministers will be nervous that it may set a benchmark for other key energy workers to follow - reviving memories of the Winter of Discontent among striking public sector workers in 1978-1979.

Today's AA report shows motorists in the South West of England, Scotland and Wales have now seen diesel prices crash through £9 a gallon - equivalent to 131.9p a litre.

The most expensive prices are at Shell filing stations which charge on average 119.73p a litre for unleaded and 133.95p for diesel.

Shell last night welcomed the pay settlement and apologised to its customers for the inconvenience caused.

The power industry was yesterday accused of starving Britain of gas in order to force up prices and profits.

Members of the House of Commons Business Select Committee quizzed regulator Ofgem and energy industry chiefs about why our gas and electricity prices are rising at one of the fastest rates in Europe.

MPs say firms deliberately failed to build more storage facilities for gas, so we must send our North Sea gas to Europe in summer, then buy expensive imports in winter.

Labour MP Lindsay Hoyle said: 'We are going to have to drag (companies), screaming all the way, to building these facilities.'

The committee also criticised the way European gas suppliers link their price to oil, which has hit a series of record highs.

Ofgem boss Alistair Buchanan said planning permission is the biggest hurdle to new storage.