Call for permanent fuel duty freeze

Logistics UK has made a plea to government to freeze fuel duty on a permanent basis in order to help shift the transport sector to alternatively fuelled vehicles in preparation for net zero.

With diesel accounting for more than 30 per cent of HGVs’ operating costs according to Logistics UK research – and many fleets now facing increased costs due to spiralling drivers’ wages in the context of the current shortfall, and financial fragility due to Covid-19 – the sector needs time to prepare, the organisation warns.

“As the logistics industry recovers from the impact of the pandemic on the economy, and with the threat of price inflation on the horizon, every penny counts for our sector, which traditionally runs on extremely narrow margins,” said David Wells, Logistics UK chief executive.

“While our members are committed to switching to cleaner alternative fuels from diesel, the cost of a new alternatively fuelled HGV makes them challenging for many businesses – despite government grants of up to £25,000 – when, at present, businesses must allow for higher operating costs, leaving less spare cash for investment.

“Our industry is fully behind the switch to alternative fuels but, in order to do so, needs a confirmation from government that fuel duty will not be used as a tool to close budgetary gaps in the economy.

“This will help our member businesses to allocate more funds to the vehicle replacement cycle, secure in the knowledge that they will not be surprised by unexpected duty hikes in the coming months or years.”

He added: “With margins pared down to a minimum, and inflationary pressure set to bite over the autumn, a guaranteed, permanent freeze on fuel duty would allow our members to recover from the impact of the pandemic and start to focus on how best to make the switch to alternative fuels on the road to net zero.”