Fuel duty must be reduced, says FTA

Date: 18/6/2012

It is no secret that the cost of fuel is going up in the UK and many motorists may have noticed a difference when it comes to filling up their tank.

However, it seems it is the commercial sector that is suffering more, as companies operating fleets of vehicles struggle to meet the rising costs of petrol and diesel.

According to research conducted by the Freight Transport Association (FTA), operating costs for heavy goods vehicles in the UK's freight industry have reached an all-time high due to expensive fuel.

Between April 2011 and the same month the following year, growth in the price of diesel meant the cost of running a 44-tonne articulated lorry increased by the equivalent of £1,900 a year.

Currently, the fuel is priced at 57.95p a litre, which means diesel duty in the UK is an average of 24p higher than the rest of Europe. As a result, British operators are at a disadvantage when competing for domestic haulage business in their own country.

The FTA noted that lorries coming from the continent could fill up a full tank on the mainland and undertake a week's worth of work using cheaper fuel, before returning to their home country.

Chief Economist at the organisation Simon Chapman said petrol and diesel prices are "the number one concern keeping hauliers awake at night."

"Whilst operating costs have now reached an all-time high, hauliers face pressure from customers not to raise their haulage rates and are seeing overall levels of activity fall as the economy slides back into recession," he added.

Mr Chapman noted this has put many hauliers in a very difficult position as they struggle to stay in credit, meaning they have to close due to costs.

He called for a cut in diesel duty, noting a 3p reduction per litre would be cash neutral for the Treasury within a year.

Chief Executive of the FTA Theo de Pencier also noted reducing fuel duty could have many benefits for the UK, as it would help to boost the economy and create jobs.

Posted by Mary Treen