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Chancellor must scrap diesel duty increases

The Freight Transport Association says that with the price of oil rising to a new record high, it is essential that the Government immediately announces that it is to scrap the proposed 2p per litre increase in diesel duty planned for October, together with similar increases planned for 2009 and 2010.

Lorry operators attending FTA's National Council meeting in London today (Tuesday 1 July) said that the increase in diesel prices of almost 50 per cent during the last twelve months was now extremely difficult to manage. If price rises continued at the present rate, then inevitably the cost of moving some goods would become prohibitive and simply not worthwhile. In the UK, the problems of the high world price of oil were further complicated by the ultra-high tax regime – duty on diesel in the UK is 50p per litre, double the EU average of just 25p per litre.

FTA Director of Policy, James Hookham said, 'We acknowledge that the Government cannot control the world price of oil. But it can re-think its policy on diesel duty. In the present cost environment, the Chancellor would be daft to impose the 2p duty increase, or the other increases planned for April 2009 and April 2010.

'The Freight Transport Association and the whole of UK industry calls on the Government to recognise these massive problems. To date, the Chancellor has done nothing to support industry apart from 'postponing' the 2p fuel duty increase from April until October this year. That is absolutely not good enough. He must certainly take early action to reduce diesel duty for industry – but in the mean time he must immediately announce the scrapping of the present proposals for duty increases this year, next year and the year after.'

The bulk price of diesel for industry was 76p per litre in June 2007. It is now 107p per litre and is continuing to rise sharply.

The Freight Transport Association represents the transport interests of companies moving goods by road, rail, sea and air. FTA members operate over 220,000 goods vehicles – almost half the UK fleet. In addition they consign over 90 per cent of the freight moved by rail and over 70 per cent of sea and air freight. FTA's website can be found at www.fta.co.uk

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