Road freight operators have had to find an additional £1.3 billion over a 12-month period to cover the rising cost of fuel, figures from the Freight Transport Association’s Cost Information Service show. The 12 pence per litre (ppl) rise in the cost of diesel (excl VAT) – from 99.29ppl in July 2010 to 111.21ppl in July 2011 – has caused the typical annual cost of fuelling just one 44 tonne truck to rise by £5,700.
The situation could have been a lot worse. Back in March, FTA and its partners in the Fair Fuel UK campaign won some much-needed breathing space for hard-pressed hauliers by influencing the Government’s decision to defer the planned one penny above inflation fuel duty hike. Coupled with a further reduction in fuel duty of 1ppl, this concerted, industry-wide lobbying effort effectively saved the logistics sector around £625 million in tax alone.
With the cost of fuel having risen steadily in the last year and the impending fuel duty rise of over 3ppl looming large for January, industry is again feeling anxious about an uncertain future.
James Hookham, FTA’s MD of Policy and Communications, said:
"Times are very tough right now, with rising oil costs and limited cash flow conspiring to make survival rather than growth the number one priority for many businesses operating trucks.
"Diesel is not an optional extra for commercial vehicle operators and the result of more fuel tax rises will be either destruction of companies or increased prices for customers, ultimately fuelling inflation. Many companies in the logistics sector are approaching a tipping point and simply cannot afford to absorb the high fuel costs that they are facing – the Government could help by deferring the duty increases planned for January and making further cuts in duty rates now. It wants to know what it can do to help growth in the economy – here is our number one ask!"
Diesel represents 40 per cent of the cost of running a truck. With carriers struggling to pass on higher costs resulting from rising crude oil prices, any future fuel duty rises will make commercial viability all the harder for the hard-bitten logistics sector and will further impede the UK’s economic growth prospects.