Drivers face biggest diesel price hike in eight years

Drivers in Britain are paying the most for fuel due to hikes in crude oil prices, with retail diesel prices marking the largest month-on-month leap in eight years, the Automobile Association (AA) said.

Retail diesel prices jumped by 6.8 pence to £1.242 a litre over the past month to mid-May, the association said in a statement.

Gasoline prices rose 4.5 pence to £1.126 pounds a litre.

"Average UK diesel prices for May have suffered their highest month-on-month increase this century," the AA said. "Hikes in the cost of petrol are the second highest since 2000."

Crude oil prices have risen by more than 40 per cent this year because of strong demand growth from emerging markets such as China and concerns over long term supplies. Oil prices have struck all-time high above $135 a barrel this week.

While gasoline supplies are relatively ample, diesel remains tight, making the hike in diesel prices higher than petrol.

The AA said consumers and businesses were feeling the impact of speculative investors, which commentators have said are a key driver of the surges in crude prices to repeated all-time highs.

"What alarms us most is the stream of comments coming from the industry and producers saying that oil is over-priced - the finger of blame being pointed at market speculators," Edmund King, the AA's president, said in the statement.

"With many UK families embarking on their holidays next week, the timing could hardly be worse," he said.

"While huge profits are made in the financial centres, an increasing number of car-owners are becoming desperate and businesses suffer from the hit on consumer spending."