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The Road Haulage Association (RHA) is asking the European Union to allow member states to introduce a discretionary VAT rate on diesel fuel, in response to soaring fuel prices. The association is seeking to meet with the European Commission (EC) before the end of the year to discuss its proposal to give European governments the option to introduce a rate of up to 30% VAT on fuel for hauliers.

The UK government would then be able to reduce the rate of fuel duty, and hauliers could claim  back the extra VAT, meaning lower overall fuel bills. RHA chief executive Roger King says the discretionary VAT move would take the sting out of rising fuel prices and provide a "safety valve to ease the volatility of price increases".

He adds: "We believe in the interests of economic stability that this kind of measure would be very useful. "It is an interesting and innovative mechanism and could operate as a voluntary arrangement, to be reviewed every 12 months." King has discussed the idea with other European transport trade associations, which agree it is an "interesting concept". But he concedes it may be difficult to win support from the EC and member states.

"We call for an end to fuel duty increases that are fuelling inflation and making a volatile fuel market worse," he adds. But he condemns the idea of firms taking trucks on the road to protest as "pointless and potentially illegal". n The Transport Association wants the UK government to immediately rescind the  recently introduced 2p fuel duty rise. The association believes most of this revenue has been claimed in increased VAT on the higher fuel price. It is also calling on the government to postpone the next duty rise.