Road freight industry paid £1.3bn more for fuel

Road freight operators have had to find an additional £1.3 billion over a twelve-month period to cover the rising cost of fuel, according to figures from the Freight Transport Association’s Cost Information Service.

The 12p per litre (ppl) rise in the cost of diesel (excl VAT) – from 99.29ppl in July 2010 to 111.21ppl in July 2011 – has resulted in an extra £5,700 to fuel just one 44 tonne truck.

However, the FTA concedes that the situation could have been a lot worse.

In March, the FTA and its partners in the Fair Fuel UK campaign won some breathing space for hauliers by influencing the government’s decision to defer the planned 1p above inflation fuel duty hike, which, along with a further 1ppl reduction in fuel duty, 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 more than 3 ppl looming large for January, the industry is again feeling anxious about an uncertain future.

James Hookham, FTA’s MD of Policy & Communications, commented that rising oil costs and limited cash flow are conspiring to make survival rather than growth the number one priority for many truck operators.

"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," he said, adding that 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. He suggested that the government could help by deferring the duty increases planned for January and making further cuts in duty rates now.