DIESEL prices have suffered their highest increase this century - but the region is still one of the cheapest places in the country to fill-up.

North-East diesel drivers are paying about 6p a litre more this month, figures reveal.

Prices have rocketed to an average of 123.7p, compared to 117.2p last month.

The price increase means the cost of filling a 50-litre tank has risen by £3.15.

Petrol prices have also increased. A litre now costs about 4p more than last month, with average prices rising from 107.6p to 112.1p.

It is a similar story in Yorkshire, with diesel rising by an average of 6.7p to 123.4p per litre. A litre of petrol has gone up by more than 4p to 111.6p.

However, despite many motorists despairing at the continuing increases, the figures released by the Automobile Association (AA) show that the region is one of the cheapest areas in the country to buy fuel.

According to the AA, prices in the region are about half-a-pence cheaper than the national average.

Only the North-West has lower average prices for diesel and petrol.

London remains the most expensive place to buy petrol.

While experts say the Grangemouth dispute and associated panic-buying has had little impact on the average price of petrol in Scotland - which is a penny more than the North-East.

AA president Edmund King said the month-on-month increase in the price of diesel was the highest this century.

The last time petrol increased dramatically was in the aftermath of Hurricane Katrina in August 2005.

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

"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.

"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."

With the price of oil yesterday soaring for the first time past $130 a barrel, forecasters are predicting no let up in the misery for motorists.