Fleet News

No end in sight for fuel price misery

The price of diesel has risen to a new record high again this week, warns the Road Haulage Association.

"Relentless price rises are driving up the costs of everything we buy because it is impossible for hauliers to absorb the cost increases, much as they are under pressure from customers to do so," says RHA director of policy Jack Semple.

"Short-sighted customers who refuse increases in the current climate are likely simply to drive their hauliers out of business."

The RHA Weekly Fuel Price Survey shows a national average price of 115.43 pence a litre (before VAT), up 0.50 pence from last week. Of the 15 weeks so far this year, the diesel price has risen every week but two. The price at the start of the year was 105.97 pence.

"Haulage is a competitive industry and fuel represents at least 35% of the cost of running a large lorry - often well over 40%," Semple said. "Rising fuel prices not only have to be recovered through high haulage rates. The increases also hit cash flow, as diesel costs must be paid up-front but customers often take 60 to 90 days to pay invoices.

"It seems that worse may be to come, with OPEC predicting increasing demand for oil for most of the rest of 2011," Semple added. "On top of that, it is clear from talk at the Commercial Vehicle Show at the NEC, Birmingham this week that other costs, such as vehicles and tyres, are also rising sharply.

"There is an urban myth going around that the Budget in March somehow let hauliers off the hook. Transport companies appreciate George Osborne's one penny cut in fuel duty and the suspension of the 3.02 pence inflation increase for nine months - but the reality is that he simply avoided, for the moment, adding to mounting pain," Semple said.

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