The cost of diesel could breach the £1 a litre level this year, the Petrol Retailers Association has warned.

The warning came as it said petrol prices were set to rise by 2p within days, pushing unleaded to a new record 87p a litre on average.

Record crude prices near $60 (£30) a barrel and a lack of refinery capacity were to blame for the increase, the group said.

Meanwhile, the AA Motoring Trust said prices were already at a peak of 86.21p for unleaded and 90.34p for diesel.

The AA added that with unleaded petrol costing on average 79.6p a litre in January, private motorists were now paying £94.69 per month on fuel against £87.43 at the start of the year. The surge means that, on average, UK motorists were now collectively spending an extra £4.83m a day on petrol compared with January, the AA said.

However, Ray Holloway from the Petrol Retailers Association also said that petrol prices could slip in the autumn.

"But diesel I'm afraid might do the opposite," he told the BBC.

He explained that refineries were unable to keep up with increasing demand for the fuel as they were built in the 1970s to supply a market that is now "totally different to today".

(Source: bbc.co.uk)