Fuel duty cut welcomed by freight and passenger operators

The chancellor has announced a 5p a litre cut to fuel duty, during his Spring Economic Statement as operators struggle with record fuel prices.

Chancellor Rishi Sunak said the move, which starts at 18:00 today (23 March) and will last until March 2023, is “the biggest cut to all fuel duty rates ever”.

The move was welcomed by trade associations, which yesterday made a combined plea for action.

The move will help logistics businesses to afford to keep supplying the nation with the goods it needs in the face of increasing fuel prices and other inflationary pressures, says Elizabeth de Jong, Director of Policy at Logistics UK: “With average fuel prices reaching the highest level on record and rising inflation, there has been an unstainable burden on logistics businesses which operate on very narrow margins of around 1%.

“The Chancellor’s decision today will help to ensure operators can continue to afford supplying the nation with all the goods it needs, including food, medicine and other essential items.

“Fuel is the single biggest expense incurred by logistics operators, accounting for a third of the annual operating cost of an HGV. The cut in fuel duty of 5ppl will result in an average saving of £2,356 per year per 44-tonne truck; this move will help to strengthen the UK’s supply chain during a time of ongoing financial and operational challenges.”

Logistics UK wrote to Rishi Sunak MP, the Chancellor of the Exchequer, on 10 March 2022 urging for a cut in fuel duty.

Said the CPT: “Today’s cut in fuel duty will help bus and coach operators with increasing costs that all road users are experiencing.

“It also runs the risk though of being perceived as an endorsement of travelling by car at a time when we need to be moving journeys from cars to sustainable transport to stay on track for the country’s net zero goals.

“Therefore, it’s vital that today’s announcement is matched by the government loudly promoting bus and coach travel and ensuring it delivers on the ambitions of its National Bus Strategy to improve services across the country. This should start by ensuring buses are given priority for road space to make journeys quicker and more reliable to encourage sustainable travel choices.”

The RHA welcomed the Chancellor’s announcement but says the Chancellor could have gone further and announced an essential user rebate similar to other countries for hauliers and coach operators.
Rod McKenzie, RHA Executive Director said: “Cutting fuel duty is a common sense move and will be a boost for the economy, but more could have been done.

“The Chancellor missed an opportunity to announce a rebate to relieve more pressure on businesses. We’ll continue to press the Government hard for this measure as firms grapple with huge operating cost hikes.

Longer term we believe the Government should bring in an essential user fuel rebate for coaches and lorries to bring UK operating costs into line with our key European competitors.”

You will receive our regular news digest – typically weekly. We are serious about GDPR and we promise to take care of your data and will never sell it or pass it on.

Your Privacy

We and our partners use technologies, such as cookies, and process personal data, such as IP addresses and cookie identifiers, to personalise ads and content based on your interests, measure the performance of ads and content, and derive insights about the audiences who saw ads and content. Click below to consent to the use of this technology and the processing of your personal data for these purposes. View our privacy policy.