As the price of oil soars through the $100 a barrel mark for the first time, drivers in the district are faced with a knock-on effect as spiralling petrol prices have gone well beyond the £1 a litre mark.

According to website www.petrolprices.com on Monday prices within a 15-mile radius of Spalding ranged between 100.9p to 105.9p for unleaded, with the average at 103.5p across a total of 26 filling stations.

Diesel has also shot up to a high of 111.9p, with the average price being 105.9p.

Robert Palmer, of Moulton Chapel Motors, is selling his unleaded at 105.0p and diesel at 110.9p, which is just under his highest price of 112p.

He said: "It looks like it's going to rise again.

"For what we normally like to gain we should be selling it at 112p.

"It's harder and harder to keep it going. But we only get used for the odd £10 here and there and lawn mower fuel. People do not fill up with us."

Mr Palmer added that new pumps were installed at a cost of £4,000 when he took over the garage about three years ago and he is committed to continuing to sell fuel.

If the pumps were removed Mr Palmer believes they could never be re-instated because of policies not to site them near homes.

Kelvin Allen, a director at Spalding haulage firm John M Allen, in Cuckoo Bridge, described the present situation as a "nightmare" and fears it will only get even worse before it improves.

He said: "It's a sorry state of affairs for the haulage industry.

"We buy 60,000 litres a month. We buy it in bulk and the cheapest we get it is 91.2p and that has gone up 24p in the last few weeks.

"We just have to try to pass the costs on and hope for the best. It's either that or we don't do it.

"It's not going to come down for the forseeable future. The Government has absolutely got to step in, but it won't."

Morrisons in Pinchbeck is among the lower priced retailers, with unleaded at 102.9p and diesel at 105.9p.

A company spokesman said: "We always aim to be as competitive as possible on a local basis.

"While our petrol prices remain competitive they must reflect activity in the market place.

"If cost prices increase, then retail prices have to increase. If cost prices decrease, we can pass that benefit onto the customer."