UK’s New Year fuel tax a £95m headache for freight industry
The Freight Transport Association (FTA) has condemned the January 1st increase in fuel duty, saying it will cost the freight industry an extra £94.25 million per year on top of the £7.22 billion per year already taken from the industry in fuel duty. The 0.76p per litre increase is the third rise since April 2010. Last year, duty on diesel rose by 1p per litre to 57.19p per litre on April 1st and by another 1p per litre to 58.19p per litre on October 1st. This latest increase pushes diesel prices to within 4p per litre of the all-time highs reached in July 2008 when oil prices were $145 per barrel. Simon Chapman, FTA’s chief economist, pointed out hat diesel is not an optional extra for industry. Rises in fuel commodity prices have already left operators facing diesel prices 9p per litre higher than a year ago – adding £3,800 per year to the bill for running an articulated truck. This latest fuel duty increase, together with those previously introduced this year, will add a further £1,200 per year. Diesel currently represents 35% of the cost of running a truck. With carriers already struggling to pass on higher costs resulting from rising crude oil prices, the latest fuel duty rise will make commercial viability all the harder for the sector. "The Chancellor is treating the road freight sector as a bottomless well from which cash to bolster the public finances can be drawn," said Chapman. "At the same time, he has embarked on a savage set of cuts to transport infrastructure that will see spending on national road schemes fall by 45% and local authority budgets for capital schemes slashed." He added that if the UK is to trade its way out of recession, its supply chains need to be cost competitive and its roads must provide reliable routes to market. Neither is achieved by a tax base spiralling well above inflation and a transport network starved of investment. FTA is concerned that the Government may be tempted to augment Treasury coffers by using environmental issues to justify fuel duty rises beyond the current commitment. The argument for increasing the rate of fuel duty for companies in the transport sector to reduce carbon emissions is dubious and could even be counter productive. Chapman remarked: "There is a propensity for government to disguise revenue raising exercises under a large green banner. However, while fuel duty hikes may influence the behaviour of the private motorist (who can substitute car journeys with public transport), lorries simply have to be driven if we want our shelves stocked." He concluded: "Ironically, raising fuel tax simply reduces the amount of cash the industry has to invest in eco-driver training and newer, cleaner engines. Fuel duty is not a lever that can be pulled to reduce the logistics sector’s carbon emissions; suggesting otherwise is simply ‘greenwash‘." Quelle: eyefortransport |