Britain’s motorists, already frustrated by the country’s severe wintry weather, face more misery as the price of fuel is driven up at the pumps. Just before Christmas, the cost of petrol hit a record high of 123 pence per litre. This was 14 per cent higher than the same time last year.

Motoring organisation, the AA, said that price hikes inflicted by the government – a VAT increase of 2.5 per cent on 4 January and a fuel duty increase of 0.76 pence per litre on 1 January – would be compounded by the increase in the price of oil which has already topped $90 per barrel.

A spokesman for the AA said motorists should prepare themselves for 3.5 pence being added to the price of a litre of fuel and should also be aware that future tax rises and the uncertain oil markets could push the price even higher.

Just how expensive the coming year is for motorists will depend on the markets, the spokesman added. He went on to point out that matters could be eased if the oil market calmed down or the pound regained some strength against the dollar.

Unfortunately, just before Christmas, the pound was at its lowest against the dollar for three months. Economists also admitted that economic recovery in the UK was not quite as strong as previously indicated. Inflation was also up 3.3 per cent, well above the Bank of England’s target of just two per cent. The British Retail Consortium has also warned that 2011 is going to be a year dogged by inflation.