HOLIDAYMAKERS will have to dig deeper into their pockets to get away this summer as fuel prices hit record highs and experts warned of further price rises to come.

Campaign groups today called on Chancellor Gordon Brown to introduce a sliding scale of fuel duty to cushion British drivers against increases in global oil prices.

The average cost of petrol was expected to match its previous high of 96.1p a litre this weekend as demand for crude oil from booming Asian giants like China remains high.

Prices are predicted to remain high throughout the summer before dropping off in late August - meaning months of misery at the pumps for motorists and hauliers.

Although fuel retailers do not expect average petrol prices to break the symbolic é1 a litre barrier, they say the cost of diesel will "definitely" reach this level.

Fears about possible disruptions to supplies from Nigeria, Chad and Iran contributed to crude oil prices in New York closing at more than 75 US dollars (é42) a barrel for the first time yesterday.

Edmund King, executive director of the RAC Foundation, said: "Even though the Government can rightly say this is a global problem, they are still raking in more money as a result of it."

He warned that poorer households, who already spend over a quarter of their income on motoring, would be worst hit by this summer's high fuel prices.

Mr King said: "Fuel prices are normally one of the factors up there in causing inflation, and that must be a concern for the Chancellor.

"For businesses generally the bulk of goods are transported by road so therefore they rely primarily on desel.

"They are going to be hit by the cost of delivery going up and will pass on this cost to shops, who will pass it on to the consumer."

Ray Holloway, director of the Petrol Retailers Association, said average prices of diesel had already reached the previous high of 98.3p a litre recorded in October last year.

He went on: "I don't think that petrol will make an average of é1 a litre, but with diesel it is going to be uncomfortable and the average of é1 a litre will definitely be reached this year."

Continuation

Mr Holloway predicted prices would level off by the middle of next week, adding: "I expect the second quarter of this year to be a continuation of price pressure but I don't expect the surge in price to continue.

"When do we see some respite from all this? At the end of August into September. Unless we have another violent hurricane season like last year, I would expect prices to come down."

He said there was so far no indication that fuel protests like those that crippled the UK in 2000 would follow the higher petrol prices.

"I think the problems behind the price increases are better understood, and I also think that as with previous price hikes motorists and hauliers know that what goes up comes down," he explained.

Speaking yesterday in New York, Mr Brown called for increased oil production to put a cap on soaring prices.

He told reporters: "Asia now takes one-third of the world's oil, where at one point a few decades ago, it only took 10%.

"The demand pressures on oil are such that we need a long-term solution to this: better transparency, more production, more drilling, more investment - more petrochemical investment in particular.

"These are the means by which we can actually get more stability into the oil markets."

But Mr Holloway said oil production was already at its peak and it was "not realistic" to increase it, adding: "There is no quick fix, even with Gordon Brown's powers."

The Association of British Drivers (ABD) urged the Government to introduce a sliding scale fuel tax with the aim of stabilising the price of petrol and diesel at 70-75p a litre.

Tony Vickers, the association's fuel tax spokesman, said: "The UK can do little to influence global oil prices but the Chancellor still has considerable control over domestic duties."

The ABD argues the Treasury is the main beneficiary of the current high oil prices because of the money it receives in fuel duty.

Mr Vickers said: "In the long term the ABD would like to see fuel duties fall in real terms. They still account for more than 70% of the price of every litre we buy."

A Treasury spokesman said fuel duty had fallen in real terms in the last five years, with the Chancellor increasing the tax only once in line with inflation.

Mr Brown pledged that he would not increase taxes on petrol to help cut the greenhouse emissions that cause global warming.

He told BBC Radio 4's Today programme: "To freeze fuel duty at a time of rising oil prices is the right decision and it is the right decision I made in the Budget.

"You have got to make a balanced judgment about the needs of the economy and the protection of citizens."