The Freight Transport Association (FTA) has been invited to meet with Danny Alexander MP – Chief Secretary to the Treasury – to talk openly regarding how falling oil prices on the cost of fuel and transport services, and how it is impacting the freight industry on a day-to-day basis.
FTA’s Chief Executive Theo de Pencier and Director of Policy James Hookham attended the meeting held on Thursday 5 February, at the Treasury when they outlined the impact of falling oil prices on the cost of fuel and transport services; equalising the cost of fuel distribution in remote areas; and the cost of deliveries and freight services in remote areas.
FTA Chief Executive said:
“FTA welcomed the opportunity to meet with the Chief Secretary – Danny Alexander, which was very constructive. As well as discussing fuel prices we also covered a range of other subjects affecting the freight industry, including the impact of the current driver shortage problem.”
According to the FTA the falling cost of a barrel of oil is being passed on ‘to an extent’ to the industry. But hauliers are not seeing this 53% fall in bulk prices because fuel duty, at 57.95p per litre, dampens the impact of reductions. Additionally, because oil is traded in dollars, the weaker pound reduces the effect of the drop in oil for UK consumers.
Mr de Pencier added:
“The current low price of oil is saving businesses substantial costs; this time last year fuel represented 37% of the total cost of running a 44 tonne truck, and the annualised cost for fuel for such a vehicle was £52,000. This has now dropped to an average of approximately £43,000, which is a reduction of 18%. In theory the falling cost of oil is great news for the freight industry, however other costs often cancel those savings out.”
Accompanying representatives from the Association to the meeting with the Minister, were FTA members and fleet directors who were able to discuss first hand with the Chief Secretary the impact of high fuel duties; falling oil prices, the cost of fuel and transport services as a whole.