UK must adopt global 'best practice' with Essential User Fuel Rebate

Governments across the world are responding to the current fuel crisis with a mix of temporary tax cuts, fuel rebates for commercial operators, emergency fuel reserves, price controls and support for key sectors such as haulage, farming and public transport.

Australia has introduced one of the largest packages. The government has halved fuel excise for three months, cutting petrol and diesel prices by around 26 cents per litre. It has also reduced the heavy vehicle road user charge to zero temporarily, provided up to A$1 billion in interest-free loans for transport and other essential businesses, relaxed fuel standards to increase supply and introduced a national fuel security plan.

The United States has focused on increasing supply. The government has released 172 million barrels from the Strategic Petroleum Reserve, allowed wider sales of cheaper E15 petrol, and temporarily relaxed shipping rules so fuel can move more easily between ports.

Several European countries have reduced taxes or provided direct support:
• Norway is temporarily cutting fuel taxes, reducing petrol prices by around 39 cents per litre and diesel by around 25 cents per litre.
• France has introduced financial support for transport, agriculture and fishing, alongside earlier fuel discounts.
• Germany has taken measures to limit pump price increases and, with Italy, Spain, Portugal and Austria, is calling for an EU-wide windfall tax on energy companies.
• Ireland has reduced fuel taxes and extended fuel allowances, but the haulage sector says further action is needed.

Some countries are also introducing demand-reduction measures. The International Energy Agency has recommended lower speed limits, greater home working, car sharing and fuel conservation.

Several countries are acting on this advice:
• Egypt has introduced remote working for some public sector staff and reduced energy use in government buildings.
• New Zealand has released emergency fuel stocks and introduced weekly tax credits for families.
• The Philippines has declared a national energy emergency and introduced subsidies for farmers and fishing communities.

The main international pattern is clear: countries are trying to shield essential users and supply chains by reducing fuel taxes, providing targeted support to transport operators and securing additional supplies. For the UK commercial vehicle sector, the strongest precedent is targeted support for essential users such as trucks, vans and coaches.

There is significant precedent for the Treasury to introduce an essential user rebate, with the Bus Service Operators Grant (BSOG) mechanism offering a rebate for bus operators and the Rural Fuel Duty Relief scheme which supported rural motorists.

This is why the RHA is calling for an essential user rebate to deal with the immediate challenge the industry faces around fuel prices.