FLEETS are paying the highest fuel prices in Europe, despite the fact that when taxes are stripped away the actual cost of the fuel is the lowest. The differential can be so extreme that a standard 100-strong car UK fleet would face an annual fuel bill £40,000 higher than an identical fleet in Luxembourg.

Esso says that since early April, after the Chancellor had raised duties in the Budget, the Government has been taking 82% of the price of a litre of Esso unleaded petrol - about 54p out of an average price of 65p. Such duty transforms fuel in the UK from the cheapest to the most expensive in Europe. The average pump price of unleaded petrol, excluding duty and VAT, for example, is 12.2p per litre in the UK, compared to 14.3ppl in Luxembourg.

But when duty and VAT is added, the UK pump price rockets to 66ppl, compared to 40.8ppl in Luxembourg. Assuming businesses can recover VAT, this equates to a real price of 54.45ppl in the UK and 34.68ppl in Luxembourg where the VAT rate is 15%.This means that an average 100-strong fleet with each car covering 15,000 business miles a year and achieving 35 miles per gallon (thereby using 1,950 litres of fuel), would face a fuel bill of £106,178 in the UK, and £67,626 in Luxembourg, a colossal difference of £38,551.