The AA predicts that petrol prices will hit a record high of £1 a litre this summer — bad news for motorists already reeling from Budget increases to fuel duty and road tax.

With the Chancellor determined to squeeze “polluters”, savvy motorists are heading online to reduce their petrol bills. The web can tell you where to buy the cheapest fuel and how to make it last.

The www.petrolprices.com website tells registered users which five petrol stations within two miles of their home postcode offer the best prices. Because these change every day, members can choose to receive e-mail alerts on the latest bargains. Luke Bosdet, of the AA, says that the site puts pressure on retailers to remain competitive.

The site was founded by Brendan McLoughlin, a 25-year-old web entrepreneur who was sick of paying over the odds. It has up-to-date prices for 97 per cent of petrol retailers across the country. Mr McLoughlin says that it is impossible to generalise on the best-value outlets — it varies, he says, from the supermarkets and big names to small independents. “That’s why the alerts are important,” he says.

Visitors to the site tap in a postcode to see the highest and lowest prices — for a selected fuel type — within range, plus a table of prices at the five cheapest stations and a zoomable Google road map pinpointing them. When I tried the site, prices for a litre of unleaded petrol within range of my North London home varied from 89.9p to 97.9p — exposing a significant potential saving of 8p.

Mr McLoughlin, who drives about 15,000 miles a year in his fuel-efficient Smart car, says that he saves £120 using the site but that heavy road users and drivers of gas-guzzling vehicles can save closer to £400.

Beyond petrol prices, the site is packed with useful tips. The “more miles per gallon” page outlines basic guidelines for fuel efficiency. Key advice — backed by the AA and often ignored or forgotten — is to moderate your driving technique, killing the urge to “floor” the accelerator. Mr Bosdet says that keeping to 70mph on motorways, rather than an illegal 80-85mph, saves 20p for every 10 miles.

The Department for Transport’s website, Act on CO2, at www.dft.gov.uk/ActOnCO2, gives a guide to smarter fuel-efficient driving. Enter basic details on the site’s calculator to see how much you could save. A motorist driving the UK average of 8,300 miles in a 30mpg car, and spending an average of 90p a litre on petrol, could save £90.43 a year.

If an environmental conscience, or pragmatism, steers you towards a more fuel-effi-cient car, Act on CO AA website, www.theAA.com, have jargon-free guides to buying greener and cheaper.

CASE STUDY: Fuelly alert

Ed Gain, 23, saves about £140 a year by using Petrolprices.com. The web designer, from Portsmouth, who spends close to £2,500 a year on fuel — more than twice the UK average — drives a 2002 BMW 318 and travels across the country for work.

Before finding the site, he used one local petrol station and random outlets while out on the road. Now he checks the Petrolprices e-mail updates every few days to find the best deals and then switches accordingly.

Mr Gain has alerts set up for six locations, so that he knows the best prices close to home, as well as en route to the places that he visits most. “It’s great,” he says. “And I have recommended the site to lots of friends.”