The cost of motoring will rise under a European Union plan to force oil companies to add more biofuel to petrol and diesel, the industry has claimed.
An analysis by the UK Petroleum Industry Association said that drivers of cars built before 2000 would be worst hit because they may have to buy a more expensive type of fuel to avoid damaging their engines.
All drivers will have to fill up more often because biofuels produce fewer miles per gallon.
The Government is also removing the fuel duty discount for biofuel from next year and this is expected to add about 2p a litre to pump prices.
Oil companies have had to spend more than £100 million in the past year on adapting refineries and storage facilities to cope with biofuels. The costs of complying with the EU directive will increase sharply over the next five years and most of the cost will be passed on to drivers.
Biofuel made from crops such as soya, oilseed rape and palm will, in theory, reduce greenhouse gas emissions because the plants absorb carbon as they grow. However, a Friends of the Earth report this week said that biofuels could increase emissions because forests were being cut down to clear land for crops.