Monday, January 4, 2016

Road Haulage and Freight Groups Cheered by Slump in Pump Prices

As Diesel Fuel Cost Falls Treasury Revenues Largely Unaffected
Shipping News Feature
UK – Despite all the efforts by lobbying groups to hold or reduce the cost of fuel in the past two years the one factor that really counts has now created a new milestone for road haulage operators who have struggled to meet fuel costs, higher in the UK than elsewhere in Europe. The current price of Brent crude has fallen 35% in a year and is now trading at £26 per barrel resulting in diesel pump prices, inclusive of VAT, slumping to below £1 per litre for the first time since 2009.

Four of the UK’s major supermarkets have set the bar at this new low, and bulk fuel and card suppliers to the haulage industry have set a rate this week a penny or so below this figure. With fuel representing around a third of their overall costs road freight operators and other logistics industry stakeholders have expressed satisfaction with the current situation, with some reservations.

Together with the Road Haulage Association (RHA) the Freight Transport Association (FTA) has supported the FairFuelUK campaign which has helped voice the dissatisfaction of the sector and now points out that government revenues remain largely unchanged by the drop in the price of crude, at least not at the point of sale. FTA Deputy Chief Executive James Hookham said:

“We need to see the wider fuel market become more responsive to ever lower oil prices. Today’s announcement by leading supermarkets is good news for commercial vehicle operators. Never forget that at £1 per litre, 60 pence is fuel duty and about 16 pence will be VAT, so the biggest winner is the Chancellor. We need to see the Government helping businesses at these uncertain times with a further reduction in fuel duty in the Budget this March.”