The warning comes after a two pence increase in fuel duty, which came into force yesterday, and may push diesel above the £1 a litre mark. It is also expected to nudge the average price of unleaded to 98 pence.

The rise was first announced in Gordon Brown’s 2007 Budget when he was chancellor and comes amid soaring oil prices and high borrowing costs.

But hauliers are warned there is worse on the way as the Budget also outlined another rise of two pence a litre next April and a further increase of 1.84 pence in April 2009.

The hike has been condemned by haulage bosses who point out the amount of tax raised by the Government on fuel is the highest in the European Union, leaving firms to struggle to compete with their overseas rivals.

Chief executive of Peterborough Chamber of Commerce John Bridge said: “We already pay the highest fuel duty in Europe and this new rise will hinder companies tying to compete internationally.

“Many lorries from the continent are fitted with large fuel tanks which allow these vehicles to stay in this country for up to 10 days without refuelling. It is an unfair advantage and, in addition, other countries offer a rebate on fuel to ensure their firms are not adversely affected.

“Last year some £45 billion was paid in fuel taxes, yet the Government only put £7 billion back into the road network.

“The impact of higher fuel costs will be to kill off our family haulage firms. It is destroying our heritage.”

Iris Frisby, a partner with E&S Frisby and Sons, of Station Road, Thorney, Peterborough, said their fuel costs soared by £20,000 last year.

She said: “We have to keep a careful eye on our fuel costs. It is a worry.

“Last year the company spent more than £197,000 on fuel costs compared to £177,000 the previous year.

“Some of the cost can be passed on to customers but, equally, you don’t want to lose customers and there is always someone else who will undercut you. It is a tough industry.”

Graham Wise, owner of Wise Trucking, of Oundle, which operates five vehicles, said his fuel costs had risen from £86,000 in 2004 to £124,000 last year.

He said: “There isn’t much you can do but to accept the increase and absorb it as reduced profit – but the industry doesn’t make large profits anyway. It isn’t possible to just to pass the rises on to the customer.

Area manager for the Road Haulage Association, Martin Dean said: “Without a doubt there will be hauliers that are forced out of business by these increases.