Don’t forget the impact of rising fuel costs on the economy, Logistics UK urges Chancellor

Tuesday 19 May 2026

As the Chancellor prepares to reveal a package of measures to support families and businesses in the wake of economic disruption caused by the Middle East conflict, business group Logistics UK is repeating its call for Rachel Reeves to reverse her decision to begin increasing fuel duty by 5p per litre from September.

“Our members provide everything that every part of the economy relies on, every day,” explains Ben Fletcher, Logistics UK’s Chief Executive, “but they are currently facing ever increasing cost pressures, most notably the sharply rising price of fuel. Crude oil now costs over $110 a barrel, and the cost of filling up a large HGV has risen by 31% to nearly £1,000 in the past three months. With most logistics businesses operating on very narrow margins and unable to absorb this level of increase, we have made clear to government that the impact is likely to be higher inflation for everyone.

“The rise in fuel prices has already benefitted the Treasury to the tune of £42 million in increased tax take since the end of February, so it is right that the government now reverses its decision to increase fuel duty, which would provide a welcome boost to our industry at such a tough trading time, as well helping to reduce price rises on the shelves.”

As Mr Fletcher continues, there could also be an impact on the industry’s ambitions to decarbonise in line with the government’s Net Zero targets: “With so little financial headroom, rising fuel prices mean logistics businesses are being forced to prioritise business-as-usual costs over investing in future growth and a transition away from fossil fuels. What our members need is an urgent package of support from government, including measures on fuel duty, low carbon fuels, electricity costs and business rates, to ensure they can keep our hospitals stocked with medicines, our shops with food and our homes with access to the goods we rely on every day. Our industry cannot survive ever-escalating costs, so it is time for the government to step in, to ensure we can still deliver for the wider economy for the long term.”

Logistics UK is one of the UK’s biggest business groups, representing logistics businesses which are vital to keeping the UK trading, and more than seven million people directly employed in the making, selling and moving of goods. With decarbonisation, new technology and other disruptive forces driving change in the way goods move across borders and through the supply chain, logistics has never been more important to UK plc. Logistics UK supports, shapes and stands up for safe and efficient logistics, and is the only business group which represents the whole industry, with members from the road, rail, water and air industries, as well as the buyers of freight services such as retailers and manufacturers whose businesses depend on the efficient movement of goods. For more information about the organisation and its work, please visit logistics.org.uk