Cut fuel duty by 15p per litre for essential users, says APPG

The Government is being urged to introduce an immediate ‘essential user rebate’ of at least 15 pence per litre (ppl) for road freight, coaches, and logistics operators by the All-Party Parliamentary Group for Road Freight and Logistics.

In a new report, the group, which is chaired by Conservative MP Greg Smith, has warned rising fuel prices have and will continue to impact the price of food, commodities and everyday goods and that urgent action is needed to protect hauliers from bankruptcy and reduce pressure on family budgets.

The APPG’s survey of UK haulage companies found that 92% of hauliers have felt little or no impact from the Government’s 5ppl reduction in fuel duty, which has been eclipsed by increased fuel prices.

It found that running costs for the average articulated lorry have risen from £45,000 to £62,300, forcing operators to pass on increased costs to consumers and onward services wherever possible.

Furthermore, only 3.5% of haulage businesses felt they would remain profitable without further support with fuel prices.

The report also finds that the fuel crisis is exacerbating a competitive disadvantage already faced by UK hauliers among the European market, with UK diesel prices at the pump significantly higher than the EU 27 average.

This sharp discrepancy has been compounded by further steps EU countries have taken to protect their respective haulage industries through both the Covid and fuel cost crises.

The call for a minimum of a 15ppl rebate for UK hauliers and coach operators is aimed at beginning to address this gap.

With rising fuel costs hitting both the sector and family budgets, the MPs warn Government should act urgently to alleviate growing inflation.

Greg Smith MP, chair of the All-Party Parliamentary Group for Road Freight and Logistics, said: “With family budgets stretched and inflation rising, it is essential that the Government put in place measures that tackle inflation and rising prices.

“Our hauliers are essential to keeping our economy strong and our supply chains moving but at present they are being hit by sky high fuel prices leaving many with little choice but to pass on these costs to consumers.

“This vicious cycle is pushing up prices and driving inflation and it is imperative that the Government counter this by introducing an essential user rebate of at least 15 pence per litre for hauliers and coach operators.

“The Government must ensure that these vital businesses are backed and given additional support to get through the challenging operating environment they currently face.”

Smith acknowledges that the Government will face significant pressures in coming months but tackling inflation and the cost of living must be at the front of this and, he says, an essential user rebate not only protects our vital haulage and coach sector but will also help to tackle rising inflation and the cost living.

He continued: “A failure to act now risks making an already challenging situation significantly worse and we urge the Government to act and introduce an essential user rebate without delay.”

Richard Smith, managing director of the Road Haulage Association (RHA), says that the report comes at a critical time for hauliers and coach operators who are suffering with “crippling fuel costs”.

He added: “This report clearly shows the urgency of providing much-needed relief for those that keep the UK economy moving and are particularly punished by rising fuel prices.

“It is inevitable that these higher costs in the supply chain end up being passed on to the consumer.”

The RHA has long called for an Essential User Rebate on fuel duty to both help reduce the cost of living for everyone and provide some direct assistance for struggling haulage and coach firms without impacting on inflation. We are glad that this report has vindicated our position.

He concluded: “We will have a new Government in place in September, and I’d urge whoever leads it to read this report and follow its proposals. We will also be ensuring the Chancellor and Treasury team are fully aware of it.”