BP and Royal Dutch Shell have reported massive increases in profits for the first three months of this year on the back of rocketing petrol prices, which are expected to hit £5 a gallon today.

BP's pre-tax profits rose 48 per cent in the first quarter to $6.6 billion (£3.3 billion) while Shell increased its profits 12 per cent to a record $7.8 billion (£3.9 billion).

The increase has been driven by the rising oil prices, which the companies have passed on to consumers in the form of higher petrol and diesel costs.

(Article continues below)

The price of oil came close to $120 yesterday but was trading slightly lower at $118 in early trading today. Meanwhile, the price of petrol continues to rise because of supply concerns in Scotland - where the Grangemouth refinery was shut down for two days because of industrial action.

Workers have now returned to Grangemouth but it will take about three weeks to get the refinery, which produces 10 per cent of the UK's petrol, up to full capacity again.

The Automobile Association said that petrol prices had hit a national average of £1.098, equivalent to £4.99 a gallon. Petrol is expected to pass the £5 mark, possibly as early as today.

Full article here.