Kent County Council is spearheading calls for councils to team up to buy oil at discounted prices to help drive down spiralling energy costs.

County Hall chiefs want local authorities to join forces to form a consortium to give it the financial clout to buy oil more cheaply, allowing it to drive down energy prices.

The proposal is due to be considered at a summit later this year when councils will consider what steps they can take to limit the impact of the turbulent economy on their costs.

Rising fuel prices have become a major financial headache for councils, who spend millions of pounds on fuel for vehicle fleets and to pay to transport children to school.

Kent County Council has already seen its £16million bill for transporting 20,000 pupils to and from school rise by £480,000 this year and recently estimated that overall, rising fuel prices would account for an unplanned for £12million increase in its costs.

KCC chief executive Peter Gilroy said rising fuel prices were becoming the Achilles’ heel of councils. A not-for-profit consortium would allow fuel to be bought in bulk, as parts of the haulage industry do.

He said: “We would use sophisticated software that buys energy on the open market. If we put together a scheme like this on a national scale, it could save local government millions. Oil is going to be local government’s Achilles’ heel.”

Nationally, research indicates that councils’ costs have increased by £239million over the last two years because of rising fuel prices.