British government considers defrosting and increasing fuel duty; logistics businesses are „extremely concerned”
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The British government could end the decade-long fuel duty freeze, increasing it by up to 5p per litre in the Autumn Budget, according to a report published in the British tabloid The Sun.
Currently, fuel duty is applied to petrol and diesel sales in the UK at a rate of 57.95 pence per litre. This rate was frozen on 23 March 2011, however, rumours of defrosting the tax turn up from time to time. The last occasion happened in March when chancellor Rishi Sunak spoke several times about the end of the freeze in order to urge manufacturers and consumers to accelerate the switch to electric vehicles.
According to The Sun, increasing fuel tax might happen this autumn. Media speculate about different degrees of increases – some mention 2p per litre, others say 5p per litre seems realistic, but even a two-digit rise is mentioned by The Sun.
The move would automatically add 2p a litre at the pumps, as the price would go up in line with inflation. But a Treasury source says it has plans for an extra 3p on top” – reports the British tabloid.
Logistics UK is „extremely concerned”
Speaking in response to rumours circulating of a potential fuel duty rise, Elizabeth de Jong, Director of Policy at Logistics UK, claimed that Logistics UK and its members were extremely concerned by rumours circulating of a significant fuel duty rise in the Autumn Budget. „Logistics businesses have worked tirelessly during the pandemic to ensure the nation is supplied with all the goods and services it needs, all while operating at very tight margins and facing severe economic difficulties; a fuel duty rise would be a huge blow to their recovery.”
The 5p per litre rise – as is speculated in the media – would increase operating costs significantly at a time when margins are most stretched and cash flow is a real problem for many businesses; the UK already pays one of the highest fuel duty rates in Europe. Logistics UK is calling for a freeze on diesel and petrol fuel duty, in addition to a reduction in fuel duty for cleaner, lower carbon fuels to support the transition to a zero-emission industry.”