Fuel prices could reach record prices by the end of the month piling more misery on hard-pressed Westcountry motorists, experts have warned.

Retail Motor Industry Petrol, which represents almost 6,000 independently-owned filling stations across the UK, said wholesale costs had risen rapidly over the festive period.

However, the increases, of 4.5 pence per litre for diesel and 5 pence per litre of petrol, plus 20 per cent VAT, had yet to be passed on to drivers.

It said that was likely to happen this weekend, with the price of diesel, already close to 141 per pence litre, predicted to outstrip the record of 143 per pence litre set in May last year.

Brian Madderson, chairman of RMI Petrol said: "This is a very worrying development but not entirely unexpected."

He added that reform of fuel taxation was "the Government's only direct control over rocketing fuel prices which are undermining society and our economic recovery".

The rises have been blamed on a number of global factors including Iran's threat to blockade the Straits of Hormuz through which 30-40 per cent of the world's oil supply is shipped.

Worries over EU refinery activity have also been putting pressure on wholesale prices.

RMI petrol also warned that the price of food – 80 per cent of which is distributed by road – could rise as a result of high diesel prices.

Any hike in fuel prices will hit Westcountry motorists hard with many having no other option but to use their vehicles on a daily basis.

Evidence has already shown that drivers are cutting down on journeys to save money.

Tim Jones, chairman of the Devon and Cornwall Business Council, said the volatility of fuel prices was one of the reasons holding back growth.

He said: "Until there is some stability in access to finance and energy and fuel prices, then the confidence that is needed to move forward, to reinvest in business, to take on new employees is not going to be restored.

"The price of fuel is a key component of the bottom line and if there is any risk of prices spiking then major investment plans are going to be put on hold."