BRITISH fleets are being prevented from reducing company car fuel bills by the lack of a sulphur-free petrol refuelling network in the UK.

Mercedes-Benz has developed a new direct injection four-cylinder petrol engine which offers 18% less fuel consumption and lower emissions than its existing four-cylinder unit, but the company will only offer the engine in countries that have a sulphur free fuel network.

Its new 1.8-litre CGI engine, which will make its debut in C-class models (saloon, estate, Sports Coupe and CLK coupe) in 2003, has significantly better fuel consumption and emissions than the current 2.0-litre.

However, countries with no sulphur-free fuel network will instead receive a less efficient, conventional 1.8-litre engine.

Simon Oldfield, general manager for Mercedes-Benz car marketing, said: 'We hope that through continuing to pressure the oil companies they will bring in sulphur-free fuel earlier.

Other manufacturers are also lobbying, and the Government has indicated it will put tax incentives in place to encourage its use.'

In last month's Budget the Chancellor of the Exchequer Gordon Brown confirmed the Government would develop new fuel duty incentives for low-sulphur fuels, but not until 2003.

Audi's new range of FSI direct injection petrol engines are optimised using sulphur-free fuel, but can run on super unleaded and premium unleaded.

'We are bringing in FSI as soon as it is in production, and we hope this will put pressure on oil companies to speed up the introduction on sulphur-free fuel,' said an Audi spokesman. 'Normal unleaded can be used, but it would compromise torque.'

BP currently has sulphur-free unleaded and sulphur-free diesel at 18 service stations in the Edinburgh area, but is unable to say at present when the fuel will be available nationally, while Shell also was unable to give any indication of when it would be introducing the fuel.