Businesses in Bradford could find themselves losing out to foreign competitors due to increasing fuel costs in the UK, bosses warned today.

Fuel is taxed more heavily in Britain than many other EU countries, meaning UK companies face higher overheads when it comes to transport.

Rising world oil prices and the 2p extra on fuel duty imposed by the Government this autumn have now seen average unleaded petrol prices pass the £1 a litre mark for the first time.

The cost of a litre of diesel has grown to an average of 103.2p.

The Government is committed to a further 2p fuel duty rise next April and another 2p increase in April 2009.

Steve Cooper, director at Greengates logistics firm LM Logistics, called the recent rises "a disgrace" and warned that many companies could find making a living increasingly difficult if fuel costs rose any higher.

He said: "Competitors from Europe can fill up before they enter the country and provide a service at a lower cost.

"From a transport point of view this is going to cause British manufacturing problems and possibly lead to an economic downturn.

"In many respects it is just another way for the Government to claim additional funding. We would call for a freeze in duty levels and a possible decrease in the amount of taxation on it."

Chris Chidley, chief executive of Bingley-based Driver Hire, said: "Increases in fuel prices for the transport sector and people who operate their own fleets means that costs have to be passed on to customers or else absorbed by the organisations. It means we do not have a level competitive playing field internationally. Raising the revenue is just another way for the UK Government to bring in a new form of tax."

Road user groups yesterday called on the Government to defer next spring's threatened 2p rise in fuel duty to spare motorists at a time of record high petrol prices.

The AA's head of road safety Andrew Howard said: "We think that at least the April 2008 increase should be deferred.

"I have not heard of any likely fuel protest and I don't think the general public would support one. They would not be too keen if a blockade of fuel depots meant they could not get any petrol and they could not, for instance, take their children to school or visit elderly relatives."

e-mail: mark.casci@bradford.newsquest.co.uk