The Freight Transport Association (FTA) is calling on Chancellor Philip Hammond MP to cut fuel duty in this week’s Budget to ensure that UK businesses can continue to trade cost effectively in a new, post-Brexit environment.

Fuel costs now represent a third of the total cost of the operation of an articulated lorry and the annual fuel bill for a 44t vehicle has risen by 39% since January 2007. 

James Hookham, FTA’s deputy chief executive, said: “Additional increases in fuel costs would need to be passed on to customers by UK operators, which could mean the death knell for new trading partnerships and continued growth for the UK at a time, pre-Brexit, when the country’s trade needs as much stimulus as possible.”

Fuel duty currently represents 61.4% of the cost of a litre of bulk diesel (excluding VAT), and FTA estimates that even a 1p rise in fuel duty in the upcoming Budget would have a significant impact on businesses’ operating costs.

“In the Autumn Statement last November, the Chancellor announced a freeze on fuel duty for 2017/18, and we hope that, at the very least, he stands by this decision,” continued Hookham. “However, if the Government is serious about boosting UK trade, FTA would urge them to go further and reduce fuel duty by 3p per litre in this week’s Budget. 

“Our estimates show that this would deliver around £1,400 annual saving on the running cost of a 44-tonne truck, which would make UK freight and logistics operators increasingly competitive in a global trading market.”

The UK currently levies the highest fuel duty in the European Union and duty would need to fall by 21p per litre to achieve parity with the average duty rate in the rest of the EU. 

Hookham concluded: “At a time of economic volatility and uncertainty around the effects of Brexit, we call on the Government to cut fuel duty in Wednesday’s Budget to ensure that the UK’s businesses can keep trading efficiently with our international partners.”

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