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FTA: Diesel Prices – Reverse duty increase and fix a rebate for commercial vehicles

The spiralling price of oil on the world market, together with the Chancellor's 2p per litre increase in fuel duty earlier this month, has pushed the price of diesel used to fuel lorries and other commercial vehicles to the highest ever levels. The Freight Transport Association says that the Government should take action to reduce the burden on industry's transport costs by introducing an essential vehicle fuel rebate scheme as soon as possible.

FTA, which represents companies operating over 200,000 goods vehicles – almost half the national fleet – says that increased fuel prices are a bill which the whole population has to pay. FTA's Director of External Affairs, Geoff Dossetter, says, 'Almost everything which we eat, drink, use or consume every day of our lives is the product of a lorry journey. For the larger vehicles, fuel constitutes approximately one-third of their operating costs. And the price of that fuel keeps rising.

'We desperately need a system which separates the way we tax fuel for cars compared with fuel for commercial vehicles – presently duty of 50p per litre is charged on both, whether that applies to a small family car doing 7,000 miles per year or a 44 tonne truck doing 75,000 miles per year. That individual truck is now paying a fuel bill of around £36,000 per year.

'In view of the current high price of oil, the Chancellor should now reverse the 2p per litre increase in fuel duty he imposed from 1 October and make early arrangements for a rebate scheme to reduce industry's fuel tax bill.'

Bulk diesel prices have now reached over 83p per litre (ex VAT) – on 1 January 2007 the price was 74.1p per litre (ex VAT), a 12 per cent increase in under 11 months.

At 50p per litre, UK fuel duty is by far the highest in Europe, compared with a European average of just 23p per litre.

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