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FTA warns of a return to 'yo-yo' diesel. prices
Page 6
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CM COVER STORY By Christopher Watton THE AVERAGE price of diesel in the UK has risen for the first Lime in eight months ahead of the 1.84p/litre increase in duty the chancellor is planning to introduce on 1 April.
According to the AA fuel price report. in January, the average price of a litre of diesel was 98.7p. The average for this month (up to 17 February) is 100.8p/litre. Until this month, the price of diesel had been gradually falling from a high of 133p/litre in July last year.
However, compared to February 2008, when diesel was 109p/litre. the average price this month is still cheaper than at any point in 2008.
In Tanner, director of communications at the Freight Transport Association (ETA), says the creeping rise in diesel threatens a return of "the yo-yo fuel prices that made fuel budget forecasting such a problem for members in 20087 She adds: "Fuel price volatility could be disastrous for some hauliers who are struggling to cope with the government's discretionary fee increases and reduced demand in this bleak economic environment" The FTA is campaigning for the government to decouplc fuel duty while the Road Haulage Association is calling for the I.84p/ litre rise to be abandoned.
The RHA's pre-Budget submission for 2009 says a second duty increase in five months would add a further £1,000 a year to the cost of operating a typical articulated lorry. Chief executive Roger King adds: "In this economic crisis we are looking to the chancellor for help — if only by avoiding a further increase in the cost flow burden."
John Stocker, business manager at Acumen Logistics, stresses that while customers were upset when prices had risen as part of a fuel cost adjustment mechanism, they had seen the benefits with prices falling over the past few months.
"It is naive to say we are seeing a period of fuel price stability," he says. "The government's tax yield is decreasing because there is less corporation tax and stamp duty being paid. All we can do is keep shopping around for new suppliers. You have to check your suppliers against the rest of the market."'
• See comment on page 3.
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