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LRUC: good news for green trucks
Page 6
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Customs & Excise is denying that the proposed Lorry Road User Charge will penalise operators with frugal trucks. Guy Sheppard
and Dominic Perry report.
Juicy tmcks win still cost more to run
Contrary to what you may have read elsewhere, fuel-eff icient trucks won be penalised by the new charge through smaller rebates. While it's true that if you run a gas-guzzling vehicle you'll receive a bigger rebate (simple mathematics dictates this) this is more than offset by the fact that you use more of the raw material in the first place.
Let's look at the sums. Assuming there are two trucks doing 100,000 miles per year. Truck A does lOmpg; Truck B, does 7.5mpg. Over the year, Truck A uses some 10,000gal/45,4001ff of fuel while Truck B burns 13,333gaV60,5311it. Assuming a pump price of 80pilit, Truck A costs its operator £36,320 in diesel and Truck B costs a substantially larger £48,424. if you factor in a rebate on those fuel bills of 23pilit then Truck A receives £10,442 back from the Exchequer and Truck B gets £13,922 as it has used more fuel. So the total fuel bill for Truck A is £25,878, compared with £34,502 for Truck B.
As both trucks are charged the same rate of 8.5p/km the bill for road use is identical at £13,600. This brings their total annual bills to £39,478 and £48,102 respectively.
The simple fact is, as now, the more fuel your truck uses, the more expensive your journey. While it would be true to say that the LRUC bill for Truck B is lower, the overall cost, based on these figures is still some £8,624 more than for its frugal counterpart.
Remember you still have to pay for what you put in the tank.
CUSTOMS & EXCISE is denying accusations that the Lorry Road User Charge (LRUC) scheme will penalise fuel-efficient trucks.
The issue blew up after Mike Shipp, director of the LRUC programme, outlined current thinking on the scheme to the Parliamentary Select Committee on Transport.
In order to create a level playing field for UK hauliers struggling to compete with Continental-based rivals, he suggested that the charge would be around 8.5p/lun while the rebate would be around 23p/lit.
"That takes no account of lots of other issues that will have a bearing on that," he warned. "Nor does that average take any account of how you may set the charge to take account of lorries of different weight ,different emissions,classes, axles and soon."
A Customs spokesman says some publications have misinterpreted what Shipp said by suggesting that the rebates will only be based on the level of fuel consumption of each vehicle.
"We are anxious to clarify that this is just an estimated figure and a number of factors will be taken into account that have not been decided yet," he adds.
However, Freight Transport Association economist Simon Chapman predicts that if you have two trucks of exactly the same type, the one that is least fuel-efficient will receive higher rebates than its greener stablemate.
But he adds that the rebate difference will not discourage fuel efficiency: "You can bet your bottom dollar that even at 45 Oft after rebate, operators will still be wanting to drive down fuel costs if they can.
"It is going to be one of the few elements of their vehicle operating cost structure that they will he able to bear down on."
The LRUC is due to be introduced in 2007/8.