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Diesel prices hitting all of UK industry Scrap duty increase

The constant increase in the cost of a barrel of oil and its consequential impact on diesel prices now represents a major cause of concern for every UK business supplying goods and services. The Freight Transport Association says that it is not only transport specialists who are feeling the pinch, but every company that requires the movement of goods – supermarkets, retailers, farmers, suppliers and virtually every company in the country. Diesel for the motorist at the pump has already passed £5.00 per gallon and the bulk price of diesel for industry is closing on £1.00 per litre.

FTA Director of External Affairs, Geoff Dossetter said, 'Diesel is the lifeblood of the economy. If you've got it, then it has been on the back of a lorry. The lorry delivers almost all of our daily needs. The food and drink in the supermarkets, cafes, pubs and homes. The clothes, and everything else, in the shops. The bricks at the building site. The list is endless. And the price of all of those deliveries is rising remorselessly as a result of the seemingly daily increases in diesel prices.

'The bulk price of diesel has risen from 75p per litre at 1 January 2006 to 97p per litre today. These prices are a major problem in themselves but they are now coupled with the dangerous uncertainty as to how high they might reach before they stabilise – and uncertainty is the enemy of any business strategy.

'The fuel price burden is something which, despite real advances in efficiency, the transport industry is unable to shoulder all by itself. Fuel price rises have to be passed on to customers – and eventually the end consumer must pay. So, higher fuel prices are inflationary not just because it costs more to fill the tank in the car, but because the price of everything we buy has a transport, and thus a diesel, element in it.

'Here in the UK we pay the highest diesel taxes in Europe and the Government is filling its boots as the world price of oil continues to go und up. UK diesel duty is 50p per litre – the average for the rest of the EU is just 25p.

'The Government must acknowledge the consequences of higher diesel prices and provide support for operators of essential vehicles. For ten years FTA has called for a decoupling of the way fuel duty is charged on commercial vehicles compared with private cars. It is a nonsense that the same system is used to charge duty on diesel for a 44 tonne lorry paying over £40,000 per year for its fuel and for a small family car perhaps paying just £500 per year. The spiralling price of diesel now makes that process ever more urgent.'

FTA welcomed the Chancellor's Budget decision to delay the 2p per litre duty increase planned for 1 April until 1 October. Dossetter said, 'It is unthinkable that the October increase should go ahead and the Chancellor would help everybody if he announced as soon as possible that he was scrapping the plan.'

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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