That was the warning after figures showed budget-busting increases in the price of petrol, gas and electricity.

Lancashire County Council's budget for gas and electricity in its buildings is expected to almost double from £4.6million to £8.8million.

The council is also set to spend £1million more than planned on powering the county's 160,000 streetlamps, even after it allowed for a 47 per cent increase from £4million to £5.9million.

It spent £1.6million on vehicle fuel during 2007/08, but splashed out almost half of that – £711,563 – between April and July.

The authority, which receives 74 per cent of council tax, this year charged average Band D homes £1,077.06, an increase of 2.95 per cent.

Its portfolio holder for resources, County Coun Tony Martin, admitted the soaring energy costs could add to next year's levy.

"Unless energy prices start reducing drastically about now it will have an impact," he said. "We will try and minimise that and we are still aiming at an increase under three per cent for 2008/09 but these increased costs make it more difficult."

Money-saving measures have included acquisition of more fuel-efficient vehicles, improved insulation and the addition of cheaper biofuel to heating oil used at County Hall.

Between April and June 2007 Lancaster City Council spent £104,798 on diesel for vehicles like bin wagons. But over the same period this year costs increased by 52 per cent to £159,216.

It has budgeted £542,000 for the financial year. Head of direct services, Mark Davies, said any effect on council tax would be a matter for councillors during the budget-setting process.

Mr Davies said the council would be looking at the possibility of re-scheduling bin wagon routes to try and make them more efficient.

Lancashire Fire Service was hit with a 33 per cent increase in fuel costs from £94,400 to £125,799 for the first quarter of 2008/09.

Director of finance, Keith Mattinson is expecting gas and electricity costs to increase by at least £100,000 from the current levels of around £300,000 a year.

He said any impact on council tax would depend on any future movement in fuel prices and whether other savings could be made.

"It's a relatively small amount of money in the context of our £60million budget," said Mr Mattinson.

He added that both Lancaster and Morecambe fire stations had recently been supplied with new fire engines as part of a programme to provide more fuel-efficient vehicles.

Lancashire Police, which spent almost £2.5million on vehicle fuel during 2007/08, had expected to splash out just over £3million this financial year.

But in the first quarter alone it spent £860,000.

The North West Ambulance Service, which does not levy council tax, faced a 37 per cent rise in fuel costs from £1.15million to nearly £1.6million during the first quarter of 2008/09 having budgeted to spent £5million over the year, an increase of almost £500,000.