Fuel crisis – now is not the time to hit hauliers

One of the chilling effects of the war in Ukraine is visible every time you pull into a fuel forecourt: prices keep going up and up.

But for the haulage industry, on which the UK’s supply chains depend, the effect is devastating. Here’s why – and what we at the RHA think can be done about it.

Fuel prices are fluctuating, mainly upwards. At the start of March Brent crude oil prices rose to $113 a barrel – adding 5 pence per litre to our bill. Shortly afterwards another 5 pence was added. As with bulk purchases, these cost increases are virtually instant while the forecourts are seeing gains - but there is a surge coming.

Low margins

Commenting, RHA executive director for policy and public affairs, Rod McKenzie said: “Ours is a low margin industry – the average haulage business makes an annual profit of 3%. Put another way, the weekly profit of a truck of may be £80 but the increase in the price of fuel can equate to between £77-£87 per week per truck, thereby completely wiping out any potential profit.

“Of course, hauliers can put up prices. That will add to the general escalating pressures on inflation for everyone. That’s bad for our businesses, some of whose existence is now threatened – and indeed for all of us in the UK, as prices rise.

“But the government can, and we think should, do something about it.”

Government action

Market forces are not in sole control of events and there are levers the government can pull.

• Freeze fuel duty for a further two years

• Introduce an essential-user rebate for lorry and coach operators

• A 12-month delay to the red diesel rule changes with a phased introduction after that

• Address our acute labour shortages by allowing greater flexibility with the apprenticeship levy

• Continue HGV Skills bootcamps to train a new generation of drivers

• Provide more lorry parking facilities – properly funded – to plug our current acute shortage

If the government is serious about levelling up and helping those in need, it must get serious about reducing the tax burden on our sector as well as addressing the skills shortage which hinder economic growth.

Now, with the Ukraine war raging, and costs escalating – is NOT the time to hit hauliers with further tax rises.