VEHICLE and fuel prices are set to increase following European agreement on tough new emission standards for 2000 and 2005. Fleets look set to pay for the billions of pounds of investment being made by car and van manufacturers and the oil industry following an agreement between European Union members and the European Parliament aimed at cutting pollution.

Pump prices of petrol and diesel are to rise as a result of the massive outlay the oil industry will have to make to meet the targets set in Europe. And car and van prices will also increase after the announcement that every petrol vehicle will have to be fitted with an on-board diagnostic system by the year 2000 and every diesel will have to be fitted with an on-board diagonistic system by 2003. Also from 2000 new models will have to undergo durability tests after five years or 49,600 miles/80,000 kilometres.

The UK Petroleum Industry Association said it is the one to have to foot the bill at a time when the country's oil companies are already suffering from poor margins. Mike Frend, director general of the UK PIA, said: 'We are going to have to make very substantial investments to meet the new standards. The ones set to come in for the year 2000 are not too bad, but it is the reduced sulphur levels for the year 2005 that will prove costly. The costs will have to be passed on to the man or company in the street, but the real impact is the cost for the industry.'