THE price of fuel has reached a record high with East Anglia recording the most expensive petrol in the country, it emerged last night.But motorists were warned that the average cost at the pumps is set to break the £1 a litre barrier as oil prices soar amid intensifying violence in the Middle East.

THE price of fuel has reached a record high with East Anglia recording the most expensive petrol in the country, it emerged last night.

But motorists were warned that the average cost at the pumps is set to break the £1 a litre barrier as oil prices soar amid intensifying violence in the Middle East.

The AA Motoring Trust said the latest figures for mid-June show the region's average price of 96.7p per litre for unleaded had topped the national rate of 95.9p - making it the highest in the country.

And yesterday petrol prices hit a record 96.9p a litre average in the UK - predicted to be reflected as a plus 98p average in this region - raising fears that a new fuel crisis is looming.

It is grim news for the region's hauliers as they struggle to make ends meet against growing competition from overseas drivers, who benefit from Government subsidies and other cost-cutting incentives.

But the rising petrol prices could have a more pronounced impact on the economy as it has a “domino effect” on businesses in other sectors.

It comes as one rural garage in Suffolk stops selling petrol after 70 years as it cannot compete with the supermarkets.

The AA Motoring Trust said tourism could also be hit hard as people are put off digging deep to fill up their tanks so they can visit beauty spots and resorts.

The average two-car owning family is now paying an extra £19.38 on petrol per month compared to the beginning of the year.

Ruth Bridger, petrol price analyst for the trust, said: “This new record high price for petrol comes right at the start of the holiday season and this is when the cost of petrol will begin to really hurt drivers.”

Spiralling prices as seen last year when the hurricanes wreaked havoc in America, had looked to be avoided in 2006, with petrol dropping to its lowest price on June 5.

But growing tensions in the Middle East where fighting between Israel and Lebanon has escalated, the ongoing conflict in Nigeria that has seen oil installations targeted, and the diplomatic stand-off between the West and Iran has added to fears over the security of oil supplies.

But Lina Hogg, president for the Suffolk Chamber of Commerce, claimed the rises were unnecessary and the oil giants could avoid them.

She added: “It will have quite a major affect on the economy as a whole and especially on small businesses that rely on petrol for travel. It is going to have an impact on their bottom line.

“In Suffolk it is a problem as we have to travel quite a long way between our major towns, for example if you look at the distance between Ipswich and Lowestoft.

“It is a domino effect. One area or sector of our economy is affected then it has a knock-on effect to other areas. We really do need to seriously lobby government and the oil industries about this.”

Pete Butler, Road Haulage Association senior area manager for the southern and eastern region, said: “It is difficult for hauliers. It's essential that they have fuel and they can't work without it. It's difficult for them to get the price rises back off the end users: their customers.”

Spencers garage in Martlesham, which boasted a tended service that helped the elderly and disabled in the area, will now no longer sell petrol after 70 years of trading.

Steve Spencer, who has owned the garage for more than four years, said: “After a long time we have been priced out of the market. The week before last I was buying petrol and diesel at three to four pence higher than the supermarkets were selling it at.

“Ten per cent of us close each year. We have apologised to everyone coming in and said thank you for their custom and support but I am upset about it. We will now be concentrating on the repairs, MOTs and vehicle sales.”

A spokesman for the Petrol Retailers Association said last night: “It's a very, very cruel world. Small businesses have an impossible task competing against supermarkets and the Government doesn't help.

“Last year 670 garages closed in UK for pretty much the same reason. You cannot sustain a business selling fuel if you're not in shops or a wider range of activities.

“The losers in this are the locals because another local service has gone.”