June 7, 2022
Image source, Getty Images
Rising fuel prices have put the transport industry in crisis as the cost of running a single truck has risen to £20,000 compared to last year, a shipping official said.
“Almost everything you buy comes on the back of a truck,” so customers were paying more, said Lesley O’Brien, director of Freight Link Europe.
Her comments come as the RAC said it now costs £98 to fill up an average car with petrol, and £101.86 with diesel.
The car group called for “radical government intervention.”
The latest figures from the RAC show the average cost of a liter of petrol rose from 177.88p on Sunday to 178.50p on Monday – an increase of 0.6p in 24 hours.
During the same period, the average price of diesel rose from 185.01p to 185.20p.
Simon Williams, RAC fuel spokesperson, said: “Drivers need to prepare for average fuel prices to rise to £2 a litre, meaning the price of a fill-up will rise to an incredible £110.
“We strongly urge the government to take drastic action to help mitigate the impact of unprecedented pump prices on drivers.”
Image source, Richard Mann
Motorists have been hit by record oil prices since the Russian invasion of Ukraine led to an increase in the cost of oil due to concerns about supplies.
In March, the government reduced fuel duty by 5 pence per litre. It said this would save a car driver an average of £100 a year, a lorry driver £200 and truck drivers £1,500.
In some circumstances, hauliers and other transport companies can recover 100% of VAT on fuel paid for commercial purposes via HMRC.
Ms O’Brien told the BBC Today programme: “This is definitely a crisis because over the last year we have seen fuel prices rise by 50% and there is no vision of them stopping, so we certainly as an industry need to keep up.” this.
“As a country, we have to understand that we need to support our transportation industry, which represents the infrastructure of the entire economy,” she said.
Ms O’Brien said fuel accounts for a third of her business operating costs. At this time last year, the fuel cost of an average articulated lorry at her company was around £41,000 a year, but with prices rising it now costs more than £61,000 a year.
She explained that her company added fuel fees to its bills to cover the fluctuating prices.
She added: “But this percentage has never been this high.” “For example, operating one of my spacecraft now costs me £20,000 a year more than it did last year.”
“It’s just crazy”
Another company, Countrywide Coaches, told the BBC that it had to sell two buses due to rising diesel prices.
Olivia Bell, director of Countrywide Coaches, said she tried to mitigate rising diesel costs by raising prices for some of her school customers – but parents ended up pulling their children off the school trip altogether.
Her family-run company is now down to 14 buses, catering to schools, private staff and military trips.
She added: “Since the price hike in September, we’ve been paying an extra £2,000 a week in fuel costs. So we’re coming to Plan B by selling the buses.”
Rod McKenzie, of the Road Haulage Association (RHA), said: “Fuel accounts for more than a third of lorry operating costs, but profit margins are between 1% and 2%.
“To put this in perspective, an average 44-ton truck gets less than two miles from a liter of fuel. That’s why every extra penny makes a huge difference, and as such, every penny must count.”
About 30% of fuel costs are customs taxes and the RHA wants the government to return this to “essential users” such as transport companies and bus operators. The RHA said they could then lower their prices for customers.
“If we help the transport industry and have a basic user discount, we will help everyone because almost everything you buy comes on the back of a truck and we will be able to pass that on to the end user,” Ms O’Brien said.
She added that the rising cost of fuel had added to pressures including a shortage of drivers, hence higher salaries and increased National Insurance payments for companies.
Furthermore, there has been an increase in truck maintenance costs and a shortage of new trucks and spare parts due to the global chip shortage.
Meanwhile, a government source told BBC News that a plan to name petrol stations that fail to pass the fuel duty reduction “is still underway”.
A formal announcement was expected last week, but it is understood that officials at the Ministry of Transport have not yet finalized the policy.
