MOTORISTS fuelling up in York will soon see the grim spectre of the £4 gallon become reality on forecourts across the city.

The price of Leaded Replacement Petrol - greener four star - has already burst through the £4-a-gallon barrier at city filling stations.

And unleaded fuel is not far behind at between 83.9 and 84.9 pence per litre - just pennies short of the 88p a litre price tag which would push it over £4 a gallon.

But, according to the Petrol Retailers' Association, the rising price of unleaded is expected to peak and drop back roughly by mid-July.

Ray Holloway, PRA director, said: "What is fuelling the increase is quite simply demand outstripping supply."

He said the price was not just linked to the rising price of crude oil - currently US$32 a barrel - but also to the open market for refined products.

He said: "Because OPEC producers have been keeping a tight rein on production, the market is short.

"They have increased production but not by enough to satisfy demand and the market price has continued to rise sharply."

The US dollar being strong against the pound and at the fact that the cost price of petrol has gone up by roughly a third had helped to fuel rises. Mr Holloway said: "We are not quite at the end of the rise yet, but it's easy to be pessimistic. Year after year our industry proves that prices can start to climb but they can fall just as quickly."

The Automobile Association says British motorists pay for the most highly taxed fuel in the European Union - with the Government taking 85p in every pound spent on petrol in tax.