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‘Cautious’ welcome for fuel duty delay

17 March 2008

The delay in the rise on fuel duty unveiled in the Budget last week was given a qualified welcome by hauliers this week, although many say the measure is a small step where a large one was needed. The scheduled 2p per litre increase in duty has now been delayed until October, although the rising cost of oil means that fuel continues to rise in price at the pumps. The delay in duty will save the industry around £140 million, says the FTA , although, since January  2007, the bulk price of diesel has risen from 74p to 92p per litre.

Roger King, the chief executive of the RHA, says: "It is encouraging to know we have a Chancellor who has listened to what we have to say. However, this deferment is essentially a short-term fix." King points out that if the October increase in duty does go ahead, it will be followed by another proposed rise of 1.84p per litre in April 2009. The RHA argues that a lowering of the diesel price for hauliers is crucial if UK operators are to be allowed to compete fairly against foreign companies, who fill their trucks with diesel "that is at least 26p per litre cheaper".

The RHA says its campaign to stop further increases in fuel duty will continue. The FTA also welcomed the decision to delay the increase in duty, but adds "any duty increase should have been put off for at least a year while the market remains so turbulent". Geoff Dossetter, the FTA's director  of external affairs, says: "The high price of fuel has an impact not just on the transport industry, but on the whole UK industry, as world prices go through the roof. In turn, these increased prices must be passed to consumers."

Diesel

Independent petrol stations warned this week that not only is the price of diesel likely to rise despite the delay in raising fuel duty, but also that there will be fewer places for hauliers to fill up. Independent petrol stations have been closing at the rate of nearly two a day (600 a year) for several years, says the Federation of Petroleum Suppliers. While the FPS was among the many who welcomed the delay in duty increase, it adds that "this does not solve problems created by duty rises for independent forecourts, merely puts them off until October".

The problem for independent petrol stations is that the price of fuel has risen so much that some cannot afford the minimum loads that oil companies will deliver - typically around 30,000 litres. Small petrol station operators also find it difficult because they have to pay duty when fuel is delivered, rather than when they sell it. The FPS has been campaigning for years to have this changed. There are now 6,300 independent petrol stations left in the UK, says the FPS, but if the current rate of closure continues, there will hardly be any in 10 years' time. An FPS spokesman says: " From a hauliers' point of view, it means there will be fewer and fewer places to buy diesel. And they are hardly going to want to queue up for 20 minutes at a supermarket, are they?"


Call for Darling to 'do more'

Those involved in selling vans were last week badgering Chancellor Alistair Darling to do more to cut the price of fuel. Duncan Coleman, the manager of website vansunited.co.uk, says that more help is necessary because 4.1 million small firms around the country relied on commercial vans. Coleman says that the commercial van driver is worth more than £35 billion to the UK economy, and that the UK has the highest fuel tax in Europe.


David Harris
Email at news@roadtransport.com
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