FUEL prices at the pumps reached a new record high yesterday with the average cost of diesel passing 140p a litre for the first time.

According to the AA the average cost of petrol is now 133.46p a litre with diesel at 140.1p a litre.

Chancellor George Osborne is expected to announce today in his Budget that he is scrapping the planned April rise in fuel duty.

But it will be little comfort for cash-strapped drivers who were paying 116.71p a litre for petrol and 117.42p for diesel just a year ago.

Yesterday diesel was on sale for 140.9p a litre at the Esso service station on Bath Hill, Bournemouth with unleaded petrol at 134.9p.

At the Holdenhurst Road Texaco garage near the railway station, diesel was 141.9p a litre with unleaded at 134.9p a litre.

Unleaded was selling for 131.9p a litre at the Esso service on Ringwood Road, Upper Parkstone, Poole, with Murco on Blandford Road, Upton, offering unleaded at 130.9p a litre and diesel at 137.9p a litre.

AA president Edmund King said: “A 10p rise in the pump price of diesel since the start of the year is a staggering extra burden on drivers.”

In Dorset, with less petrol stations, and higher costs to retailers located further from refineries, have left drivers paying more.

Barry Froud, of East Dorset haulage business Alan Froud Ltd, said spiralling fuel costs could reduce the government’s revenue from income tax as UK businesses struggled for survival. Steve Hitchings, who runs Ken’s Cabs in Blandford, said: “Rising prices are hitting into our profit margin. We are limited by council tariffs so we can’t put our prices up.

“Drivers are having to work longer to retain their income.”

Hazel Hartle, who owns Purbeck Ice Cream in Kingston, operates five vans. “We fill up off the island, but we do have an account with Moonfleet in Swanage. It leaves a bad taste when you fill up with a multinational,” she said.