FUEL prices in the UK are being hit by Gulf War fears that threaten to push them to record levels. In the past week, fuel prices reached a new high for the year, at a national average of £3.51 a gallon.

The weekly national average cost of unleaded rose from 76.56 pence per litre (ppl) week ending February 14 to 77.28 ppl for the week ending February 21. That means a rise of three pence per gallon to £3.51. The weekly average price of diesel has gone from £3.51 to £3.57 per gallon (over a penny a litre) since just the beginning of February.

Fleet and fuel management firm Arval PHH carried out the research and said the price movement was a clear effect of building tension in the Middle East.

Danny Clenaghan, managing director of fuel and business mobility at Arval PHH, said: 'The continuing tensions in the Middle East have resulted in the cost of crude oil staying well in excess of $30 per barrel. That, in turn, has led to rising forecourt prices.'

But the research also showed the value of shopping around for fuel, as the difference between the cheapest and most expensive location in the UK was 12 pence per litre (54p a gallon).

Clenaghan added: 'Although £3.50 per gallon is a significant increase, the really 'psychologically important' level is 80 pence per litre – because prices on forecourts are measured in litres and that's what drivers see when they fill up. If oil prices stay volatile we could see petrol prices inching closer to that break point.'

'Meanwhile, both businesses and motorists are suffering from these latest increases. This is a golden opportunity for the Government to win itself a lot of friends by reducing fuel taxes and easing the pressure.'

Some speculators have said that prices could rise by a further 2p a litre or 10 pence a gallon by the middle of this month, but if hostilities start, the increase could be even larger.