Take the heat out of fuel prices says
May 14, 2004
The Freight Transport Association has called for a temporary reduction
in the high level of fuel duty paid in the UK. FTA believes that the dealing
with the current high oil prices is more important that the prospect of
the scheduled duty increase of 1.9 pence per litre in September. Massive
hikes in the price of oil in the past weeks have seen pump prices rise
to well over 80 pence per litre – an increase five times that of
the one planned by the Chancellor.
FTA Chief Executive Richard Turner said, ‘The Chancellor has scheduled
a 1.9 pence per litre increase in fuel duty for 1 September 2004, but
fuel costs have risen recently by five times this amount. I am confident
from the long-term dialogue FTA has had with the Treasury that no government
would increase fuel duty if prices remain at this level.
‘Our focus instead must be on how the impact of the massive upturn
in energy costs will affect business and everything we do now. We must
also ensure that UK maintains its competitiveness and ability to operate
in the short-term. If the 10 pence rise in fuel prices persists (and
it could go even higher) UK industry will have to shoulder extra costs
of over £1.35 billion – that is nearly £5,000 on the
annual operating cost of the largest articulated truck. There is nowhere
else for this extra cost end up than with the consumer.
‘Therefore FTA has asked Government to consider making a temporary
reduction the existing high level of taxation for truck fuel to take
the heat out of the current high prices.
‘At present 10 per cent of the price of every product bought in
a supermarket is the costs of the transport to get it there. If fuel
prices rise by 10 pence per litre, this will put transport costs up by
5 per cent and, on average, will up the cost of everything we buy in
the shops by half a per cent.
‘The implications for the global economy are also serious should
oil prices remain at $40 per barrel and over. Consistently high fuel
prices could trigger global recession and I am certain that this should
be the focus of the Treasury, not a 1.9 pence per litre duty increase.’