Rise in diesel price to hit hauliers hard in 2011
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CM COVER STORY , her.waItonfarbi.co.u1-, A SPIKE IN THE price of bulk diesel ahead of January's fuel duty rise of 0.76ppl has hit hauliers already suffering the economic repercussions of delayed deliveries due to had weather.
According to Freight Transport Association (FTA) figures (see graph right), the average price of bulk diesel hit 103.54ppl on 20 December, a 12.3% hike compared to the price on 4 January (92.15pp1), while the Road Haulage Association (RHA) says its members reported average buying prices of 105.25pp1 on Friday 17 December. Some RHA members have reported paying 110 ppl in the past few days.
In a letter to the Chancellor George Osborne, RHA chief executive Geoff Dunning, writes: "We are calling on you to postpone or cancel the increases in diesel fuel duty that are planned for January and April, on the basis that the revenue that you would expect will be available to the government as a consequence of the rising global price of oil, and the subsequent rise in the price of diesel."
Nick Deal, manager of logistics development at the RHA, says the
sudden rise in price is the result of demand from countries experiencing cold weather. However, by comparison the average price of bulk diesel this time last year was 90.23ppl, he adds.
Arran Osman, MD at Langdons, says that with fuel on an "increasingly upward trajectory" the chilled specialist is "now feeling the pinch',"
"Although our customers have been amenable to a fuel premium on our core tariffs, we recover fuel costs at a rate of around 30% of operating expenditure and with current prices rising to 106 ppl [excluding VAT], we are absorbing diesel costs within our squeezed, already fragile margins," he says.
Dominic Yeardley, MD of Eurovision Logistics, adds: "You don't want to ask your customers for a pay rise [at the moment]. They are in tough markets too."
Mike Presneill, MD of Presneill Tipper Contractors, bought bulk diesel at 1065ppl on Monday: "We have 30-odd thousand tonnes of salt [for delivery for road gritting] and we need to get it out."
Ray MacDowall, MD of car carrier ECM, says the company is operating under bulk diesel prices that were last seen in the summer of 2008.
He says that while fuel escalators were standard, some operators would suffer given the steep rise in fuel price: "The methods for adjusting tariffs in accordance with fuel prices vary, which can lead to a time lag in the adjustment to rates following a price movement in diesel."
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