Petrol has broken the £1 a litre barrier for the first time on history. Joe Willis looks at why fuel prices have rocketed

ANALYSTS say the storms that killed thousands in the US are also to blame for record prices at UK pumps.

US oil companies last week bought up to 20 shiploads of European petrol after Hurricane Katrina forced nine oil refineries in the southern states of America to close.

This - along with an increasing demand for fuel from developing countries - has hit supplies to the UK market and sent prices soaring, experts say.

The average cost for a litre of unleaded was about 95p a litre yesterday - up more than 2p from Friday.

However, several petrol stations in the North-East and North Yorkshire are already charging up to 105.9p.

With wholesale suppliers raising their prices last week, experts say many other retailers are likely to follow.

A spokesman from the RAC said last night: "The recent and ongoing rises in fuel prices are linked to world-wide supply and demand - the demand being from the rapid industrialisation of India and China, as well as Hurricane Katrina's effect on the oil industry."

But Ray Holloway, spokesman for the Petrol Retailers Association, said although the hurricane may add 10p to the price of a litre, prices could start to fall when demand drops.

Mr Holloway said: "Some motorists this morning will be looking at price signs seeing a pound plus, but I do stress that I think this is a spike and that prices will fall away in September."

However, he warned there was a danger of price rises in the run-up to Christmas as more oil was required for heating fuel stocks.

The price rises are causing unexpected problems on the forecourt, with many signs unable to display prices of more than 99.9p.

BP said it had already started to convert price displays and signs in its petrol stations to cope with higher prices.

Shell said it was examining a number of solutions to the problem.

Experts say the work could cost the firms millions of pounds