Cut diesel duty to protect UK economy, Logistics UK urges government

Friday 11 March 2022

Sky high fuel prices are placing an unstainable burden on UK businesses and the government must introduce a temporary reduction in diesel fuel duty to protect the economy, according to one of the UK’s biggest business groups, Logistics UK. Writing to Rishi Sunak MP, Chancellor of the Exchequer, ahead of the Budget 2022, Elizabeth de Jong, the business group’s Director of Policy, comments:

“Logistics businesses, which operate on very narrow margins of around 1%, are currently facing significant increases in the price of fuel. These additional costs cannot be absorbed by logistics operators and it is unavoidable that much of these cost rises will need to be passed on to end customers as a result. Fuel is the single biggest expense incurred by logistics operators – it accounts for a third of the annual operating cost of an HGV and without it, goods cannot be delivered to their destinations. Logistics UK is urging Rishi Sunak MP to cut diesel fuel duty in the next budget.  This reduction could be temporary and reviewed in the Autumn Statement, should fuel prices have fallen.”

Crude oil was trading at its highest level for 14 years on 8 March 2022. The cost of crude oil has risen by 12% since the start of the Ukrainian conflict, and 41% since the start of the year, and the price of diesel is 24% higher at the forecourt year on year. Logistics UK estimates that just one penny increase in duty adds around £470 per year to the cost of running one truck. 

Logistics UK is one of the UK’s leading 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 COVID-19, Brexit, 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, sea 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.