Fleet News

Budget 2004: Duty increase raises costs

DUTY increases in petrol and diesel could add thousands of pounds to fleet running costs.

Although there is a brief respite, duty rates for sulphur-free fuels will be increased in line with inflation from September 1, 2004, with the duty for ultra-low sulphur fuels set at 0.5 pence per litre above this level.

A fleet of 50 petrol cars (assuming 10,000 business miles a year and 35 mpg) will find its annual fuel bill rising by more than £1,200. With diesels the costs may rise by around £1,000.

Janet Eastwood, head of product management (fuel) at Arval PHH, operator of the AllStar fuel card, said: 'The increases are another strike against British competitiveness. Although deferred until September, the rise of 1.92 pence per litre on low-sulphur fuels will hit fleets hard.'

According to Bank of Scotland Vehicle Management, the increase for larger fleets could be more than £10,000.

Mike Waters, head of market analysis at fleet leasing company Arval PHH said: 'The good point is the reduced increase on sulphur-free fuels. Increased take-up of these will encourage the development of cleaner vehicles.'

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