Wednesday, February 27, 2013

Road Haulage Operators Give Chancellor a Nudge on Diesel Prices

Exchange Rates are Hitting Industry Regardless of Other Factors
Shipping News Feature

UK – Road haulage operators have picked up on the latest figures showing the continued rise in fuel prices, despite Government postponements of proposed duty increases. Since the start of the year fuel has risen by 6 pence per litre at the pumps, but some say the reason is one over which neither trucker, nor government minister, has any control. The continued escalation is principally due to the exchange rate against the US dollar, the currency under which all oil markets conduct their business. When dollars cost more, up goes the price of diesel, regardless of other factors with every 5 cent loss on the dollar/pound exchange rate resulting in a diesel price increase of around 2 pence.

The Road Haulage Association (RHA) in its weekly fuel survey points out that as of the 25th February diesel prices stood at less than a penny per litre below their highest price of all time yet the dollar price of Brent crude is only slightly above the average for the past twelve months. Analysts predict that the Chancellor is unlikely to impose the next duty increase, due in the Budget on March 20th but the RHA obviously feel it’s time for a reminder that Britain’s hauliers cannot operate at a loss with RHA Manager of Logistics Development, Nick Deal, saying:

“Yes, demand pricing for diesel is up slightly, along with the Brent oil price, but the sudden exchange rate dip makes it all the more important that hauliers should insist on a profit even if the situation gets worse. This [current situation] is quite simply down to the dip in the exchange rate. According to today’s Financial Times, the exchange rate has hit a two-year low of just under 151 cents.

“Following on from last week’s announcement that the UK credit rating has been downgraded, the Pound continues to fall. To help the industry to make the profit that is essential to survival, if ever there was a time for the Chancellor to act on fuel duty, that time is now.”