Industry calls to scrap fuel duty rises

Fleet industry leaders are calling on the government to scrap planned rises in fuel duty in the face of rocketing oil prices.

Increased demand from America and China - together with concerns about a drop in North Sea oil production and attacks on facilities in Nigeria - have led to dramatic increases in oil prices in recent weeks.

With the cost of a barrel reaching a near-record $78 (£38) and analysts predicting $100 (£48) by the end of the year, the Freight Transport Association (FTA) is calling on exchequer secretary Angela Eagle, to abandon plans for a two pence per litre increase in fuel duty in October.

The FTA’s chief economist, Simon Chapman, believes the planned fuel duty increase may have seemed reasonable when oil prices were at $60 a barrel, but the policy now looks out of touch.

He said the chancellor should announce a change of plan and ratcheting up fuel prices still further will undermine competitiveness and inject inflationary pressure into industry’s cost base.

His views have been echoed by Julie Jenner, chairman of fleet operators’ association ACFO, who explained that HM Revenue and Customs has just put advisory fuel rates up again.

She said they only do that when prices fluctuate by 10% or more and if another two pence per litre rise is going to be a double whammy.