Hurricane Katrina?s impact reached the Bermuda consumer on Friday when the Ministry of Finance announced an 8.6 percent increase in the price of premium gasoline.

Devastation from Katrina has reduced US refinery capacity severely, sending prices for gasoline soaring around the world.

The price of premium gasoline jumped 13.7 cents to 172.49 cents per litre. That means that a gallon of gas, which was selling at $6.01 last week, now costs drivers about $6.53.

David Rose, oil products manager for the Shell Company of Bermuda, said on Friday that price increases will cause the average car fill-up to rise about $4.

?Everyone hears the news. They know what is going on,? he said. ?It is quite substantial but indications are the price will soften next month.?

The Ministry of Finance set the price for diesel 5.4 cents higher. It now costs 140.1 cents per litre. Kerosene rose 6.3 cents and now costs 116.90 cents per litre.

The increases at local pumps, which only sell premium gas, arrived as vehicle owners in the United States began to see relief. The average price of a gallon of regular gas in the US was $2.89 on Friday, down from $2.92 on Thursday and an all-time high of $3.06 reached on September 5, according to Oil Price Information Service.

Mr. Rose cautions against comparing American gas prices to those paid in Bermuda, however, as the US quotes prices for the lowest grade of gas, 87 octane or regular gas, while Bermuda?s gas is premium or 98 octane.

Before Friday?s increase, gasoline prices had already advanced 11 percent from July, 2004 to July, 2005, according to the Department of Statistics.