Following sustained and concerted lobbying by the Freight Transport Association and its partners in the FairFuel UK campaign, the leading trade body is delighted by the Government’s decision to cancel January’s 3.02 pence per litre fuel duty hike in its Autumn Statement.  If the planned increase in fuel duty had been left unchecked, industry would have been picking up the tab for an additional £325 million on its annual fuel bill.

    The Chancellor’s decision will provide a much needed lifeline to many businesses as the price of diesel has risen by over 13ppl (13.9 per cent) in the last year, representing an extra £1.4 billion cost to road freight operators.

    Commenting on the fuel duty reprieve, Theo de Pencier, FTA’s CEO, said:

    “We have avoided a horrendous New Year’s hangover; January’s rise would have cost the industry around £325 million.  But while we are relieved that the Chancellor has steered us out of immediate danger, it is obvious that getting the UK back on the road to recovery requires a long term fuel duty strategy, and one which doesn’t make tough times that much tougher for businesses in an already uncertain economy.”

    Overall, commercial vehicle operating costs have risen by 6.2 per cent in the year while over the same period haulage rates have risen by 4.5 per cent.  As a result, profit margins, which are typically less than three per cent in the haulage sector, have been under significant pressure.

    Earlier this month in a House of Commons debate sparked by a government e-Petition, the Treasury heard from backbench MPs across the main political parties of how businesses and hauliers in their constituencies have suffered at the hands of the highest fuel duty in the EU.

    de Pencier concluded:

    “Today’s decision will help to keep the wheels of industry turning and shows that government has listened.  However, the Chancellor has not been bold enough.  He should have ruled out the planned 3 pence per litre duty rise in August 2012 as, if world oil prices remain high and above $100 per barrel into next year, it will still hit industry hard.”