Fuel duty puts foreign truckers miles ahead of UK, says FTA
Thursday 06 October 2011
Foreign truckers get more mileage for their money thanks to the disproportionately high rate of fuel duty imposed by the Government on UK hauliers. The Freight Transport Association says that £1,000 of diesel bought at a forecourt in Europe will take a typical heavy goods vehicle over 280 miles further than one that filled up at a forecourt in the UK.
That is the equivalent of travelling from Dover to Bedford and back, (see illustrative map: http://bit.ly/pdkULN ). Even if one accounts for the fact that most UK hauliers buy their fuel in bulk, the extra mileage achieved by a foreign truck carrying £1,000 of fuel bought on the other side of the Channel is still a staggering 220-plus miles. Such stark fuel price disparity is putting domestic hauliers under increasing pressure to compete.
Theo de Pencier, FTA’s CEO, said:
“With rates of duty on the Continent up to 24 pence per litre lower than on this side of the Channel surely it is in the UK’s best interests for Government to level the playing field. If something isn’t done to redress this imbalance we will see more domestic hauliers pushed to the limit to try to remain competitive; the result will inevitably mean more costs being passed on, which will stoke inflation further, or, worse still, mean more redundancies and more companies going bust.”
Excluding VAT, fuel duty accounts for around 50 per cent of the cost of diesel in the UK, compared with an average of just 35 per cent in the EU. This is at a time when UK transport operators have seen the cost of bulk diesel shoot up by 15 per cent over the past 12 months. Fuel duty is the number one concern of FTA’s 14,000 members and as more companies struggle to achieve profitability this concern is becoming more pressing. A recent survey by leading trade publication Commercial Motor found that 89% of respondents from the haulage industry said a cut in fuel duty topped their wish list of the changes they would most like to see in the industry, up from 61% in 2010.
de Pencier continued:
“Fuel now accounts for around 40 per cent of total truck operating costs in the UK; with persistently tough trading conditions and cheaper competition from overseas, our logistics sector is under increasing pressure to maintain an even keel.
“While we secured a fuel duty reprieve in the budget this year, plans to increase it in 2012 could hit us hard and effectively price the UK off the road to recovery. We urge Government to reconsider these plans or else risk widening the gap between UK and European hauliers.”
FTA is a lead partner in the Fair Fuel UK Campaign to see a fairer deal on fuel and to scrap two rises planned for 2012.
Notes for editors
Full URL for colour map illustrating the extra mileage possible from fuel bought in Europe: http://www.fta.co.uk/_galleries/downloads/fuel_duty_map_v2.pdf
Based on a 44-tonne truck and using an average fuel consumption of 8.2 miles per gallon:
1. £1000 of diesel purchased from an average EU forecourt would allow for 1564 miles of travel while £1000 of diesel purchased from an average UK forecourt would allow for 1284 miles of travel, a difference of 280 miles.
2. £1000 of UK bulk diesel would allow for 1342 miles of travel, 222 miles less than £1000 of diesel from an EU forecourt.
3. Excluding VAT, average UK bulk diesel increased 15.2 per cent between 20/09/10 and 20/09/11, from 97.31 pence per litre to 112.07ppl. (Source: EnergyQuote JHA).
4. Excluding VAT, average EU forecourt diesel price on 20/09/11 was 95.49ppl. (Source: EC Directorate-General for Energy’s Oil Bulletin).
5. Excluding VAT, average UK diesel forecourt price on 20/09/11 was 117.00ppl – up 15.7 per cent in 12 months (Source: ARVAL UK Limited).
Therefore, average EU forecourt diesel is 21.51ppl cheaper than UK forecourt diesel excl. VAT and 16.58 ppl cheaper than UK bulk diesel excl. VAT.
6. Based on FTA Manager's Guide – July 2011 update, fuel accounts for 40 per cent of total costs for a 44-tonne truck based on an average mileage.
7. UK fuel duty fuel duty currently stands at 57.95ppl which represents 49.5 per cent of forecourt diesel (excl. VAT) and 51.7 per cent of bulk diesel (excl. VAT).
FTA Press Office