Fleet News

Call made to cancel planned fuel duty rises

The government is being called on to cancel planned rises in fuel duty in the face of rocketing oil prices.

But some members of the fleet industry say higher fuel prices must be endured in the name of environmental protection.

Oil prices have shot up over recent weeks, due to increased demand from America and China, and there is concern that North Sea production is about to drop when rigs are closed for maintenance.

Militant attacks on oil targets in Nigeria have also affected supplies, and the cost of a barrel has reached a near-record $78 (£38). Oil industry analysts expect prices to touch $100 (£48) a barrel by the end of the year.

The Freight Transport Association (FTA), fearing soaring costs for fleets, is calling on exchequer secretary Angela Eagle to abandon plans for a two pence per litre increase in fuel duty, due to arrive in October.

“The planned fuel duty increase may have seemed reasonable when oil prices were at $60 a barrel,” said Simon Chapman, the FTA’s chief economist.

“However, the policy now looks out of touch. The chancellor should announce a change of plan. Ratcheting up fuel prices still further will undermine competitiveness and inject inflationary pressure into industry’s cost base.”

Julie Jenner, chairman of fleet operators’ association ACFO, said that personally she agreed with the FTA.

“HM Revenue and Customs has just put advisory fuel rates up again,” she said.

“They only do that when prices fluctuate by 10% or more. If that comes into effect on August 1 and we then get another two pence per litre rise then it puts drivers on the back foot. It’s going to be a double whammy.

“From my industry dealings it wouldn’t seem to be the right time to put duty up.”

But a fleet industry source, who asked not to be named, said the planned rise duty should stay.

“Nobody wants to pay more for anything, but if the government is serious about the environment it shouldn’t cancel the duty rise, because it would be sending confused messages and in appropriate signals,” he said.

“It’s a lose-lose situation.”

  • To get the cheapest fuel prices, advise your drivers to avoid motorway service stations. The IAM (Institute of Advanced Motorists) Trust said petrol at services was up to nine pence per litre more expensive than off motorways sites, and diesel seven pence.
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