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Industry demands government to take urgent action on fuel prices

Tuesday, March 15, 2022 - 10:07
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Thousands of hauliers are being urged by the RHA to write to their MPs to ask for urgent action on fuel prices ahead of the March Budget.

The call comes as the industry faces record high diesel prices with crude oil trading at its highest level for 14 years last week and prices rising to around $140 a barrel.

The RHA estimates this price hike could see pump prices hit up to 178 pence per litre, within the next two weeks, if the war in Ukraine continues.

The call for hauliers to lobby their MPs follows a formal RHA submission to HM Treasury highlighting the many financial constraints faced by its members.

Budget Red BoxThe association is demanding the government back hauliers and deliver an essential user rebate of 15p per litre, mirroring an approach taken by other European nations including Spain, France, Italy, Belgium, Hungary, and Ireland.

The RHA is also urging the Treasury to delay the planned removal of rebates for red diesel on 1 April by 12 months which it warns will be “devastating” for hauliers who have seen their wider operating costs increase by 17% for an HGV in the past year combined with the 18% increase in drivers’ wages.

The association has also raised these points with the Exchequer Secretary to the Treasury, Helen Whately.

The RHA added: “We are in contact with Treasury officials to ensure the impact of these rising cost pressures is heard at the highest levels and we have held meetings with several MPs to highlight the effect of costs including the Parliamentary Private Secretary to HM Treasury, Craig Williams MP, and the Deputy Speaker of the House of Commons, Nigel Evans MP.”

Hauliers wishing to contact their MPs can do so using an RHA template here. The association is also asking operators to add their own personal experience to the templated letter to highlight the difficulties they are facing.

In the same week Logistics UK issued a call for a temporary reduction in diesel fuel duty, pointing to rocketing crude oil prices, which have risen by 12% since the start of the Ukrainian conflict, and 41% since the start of the year, with the price of diesel 24% higher at the forecourt year on year.

Logistics UK estimates that just one penny increase in duty adds around £470 per year to the cost of running one truck.

Writing to Rishi Sunak MP, Chancellor of the Exchequer, ahead of the Budget 2022, Elizabeth de Jong, the business group’s policy director, said: “Logistics businesses, which operate on very narrow margins of around 1%, are currently facing significant increases in the price of fuel.

“These additional costs cannot be absorbed by logistics operators, and it is unavoidable that much of these cost rises will need to be passed on to end customers as a result. Fuel is the single biggest expense incurred by logistics operators – it accounts for a third of the annual operating cost of an HGV and without it, goods cannot be delivered to their destinations.

“Logistics UK is urging Rishi Sunak MP to cut diesel fuel duty in the next budget. This reduction could be temporary and reviewed in the Autumn Statement, should fuel prices have fallen.”

Paul Holland, MD of UK Fuel, Allstar Business Solutions, said: The budget that will be released on the 23rd of March will come at an interesting time for the UK economy in general and the fuel industry, in particular. On one hand, the government is committed to decarbonisation and switching to electric vehicles (EVs), on the other fuel prices have soared to the point that businesses and consumers are more than feeling the pinch.

In ordinary circumstances we might expect fuel duty to remain high in order to incentivise a move to cleaner fuels, but what we may see instead is something we have seen in other countries, which is a reduction in fuel duty in order to keep the price at the pump from rising to the point that everyday life and business operations are affected further.

We would welcome any help the new budget can give to fleet operators and UK businesses generally at this difficult time, and implore the government to do so.

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