One alternative is bioethanol - an alcohol product that can be produced from sugar beet, oilseed rape and wheat.
In the US the use of bioethanol is already well established and three billion gallons are produced there each year.
While some land belonging to British farmers is registered for use to grow crops for energy, there is currently no refining capacity to turn them into fuel.
Farmers have to export their crops to EU countries which have the technology to refine it into bioethanol.
According to Peter Kendall, deputy president of the National Farmers' Union, Britain lacks the political will to develop the bio-fuel industry.
He said until fuel companies are obliged to ensure a proportion of their fuel is renewable, there will not be the incentive to invest in the bio-fuel industry in the UK.
"No one knows in six months or even 18 months time what the price of crude oil will be," he said.
"What we are looking for the Government to do is to introduce a renewable fuels obligation which would require a minimum amount of fuel company sales to come from renewable sources."
Concerns have been raised that dedicating land for use to grow crops for fuel would reduce the amount of food Britain produces.
Bioethanol
Mr Kendall, who grows crops for energy use on his Bedfordshire farm, said Britain already has enough wheat to produce a significant quantity of bioethanol without a cut in food production.
"We already export out of the UK three-and-a-half to four million tons of wheat a year. That would produce a significant amount of bioethanol.
"We also have 8% of land set aside that could be put to use," he said.
Mr Kendall said in times of food shortages the crops could easily be switched from bio-fuel to food stock.
"At the moment some farmers are considering leaving that land idle. I think that is a very poor use of a natural resource."
Bioethanol, in common with many renewable fuels, costs around twice as much to produce as fossil fuels, but Mr Kendall believes that could be off-set at the pumps by a reduction in fuel duty and car tax.
Environmentalists are optimistic that the high price of oil will encourage the development of sustainable alternatives.
With road transport currently responsible for around 22% of UK carbon dioxide emissions, Friends of the Earth (FoE) is calling on the Government to ensure that 5.75% of fuel comes from bio-fuel by 2010.
Mike Childs, of FoE, said: "The Chancellor has an important role to play to encourage this move.
"He must stand firm on fuel tax, and take action in his next budget to make it cheaper and easier for people to use greener transport."
