The warning comes as both the RHA and Logistics UK step up pressure on Chancellor John Healey ahead of the Autumn Budget on 28 October, calling on the government to retain the current fuel duty cut as operators contend with higher diesel prices and wider cost pressures.
Fuel duty on petrol and diesel currently stands at 52.95p per litre, following the 5p temporary reduction introduced in 2022. In May, the government extended that cut until 31 December 2026 in response to rising fuel prices linked to the Middle East conflict.
Under the government’s current default timetable, duty would rise by 3p per litre on 1 January 2027, taking the rate to 55.95p, followed by another 2p increase on 1 March, restoring the pre-2022 rate of 57.95p. Inflation-linked uprating is subsequently expected to resume. However, ministers have explicitly said that the final fuel duty rates will be confirmed at the October Budget.
RHA: 5p rise would cost a lorry £2,325 a year
Research commissioned by the RHA estimates that a 5p-per-litre increase would add £2,325 annually to the fuel bill of a single lorry.
Across the wider economy, the organisation calculates that the same increase could add £1.9 billion a year to household living costs, arguing that higher transport costs would ultimately feed through into the prices of goods.
“A fuel duty hike is a food price hike,” said RHA managing director Richard Smith. “Almost everything on a supermarket shelf got there on a lorry. There is nowhere for additional costs to go but onto customers and onto the shelf. Where it can’t be passed on, firms go under.”
The association says typical haulage margins are around 2%, leaving operators with limited capacity to absorb further increases in diesel, vehicle, maintenance, insurance and compliance costs. It is calling not only for the planned rises to be abandoned but also for an “essential user” fuel rebate for HGVs, coaches and vans.
Such systems already operate elsewhere in Europe, with commercial diesel rebate arrangements available to qualifying operators in countries including France, Italy and Spain.
Logistics UK also calls for 5p cut to stay
Logistics UK issued a similar warning in its own Budget submission published on 9 September.
The organisation wants the Chancellor to maintain both the existing fuel duty rate and the full 5p reduction, arguing that fuel represents roughly one-third of an HGV fleet’s running costs.
“Any increases in fuel duty can significantly affect business viability, investment decisions and the cost of living,” said Logistics UK chief executive Ben Fletcher.
The group warned that a fuel duty rise could have what it described as a double inflationary effect, with consumers paying both more at filling stations and more for goods whose distribution costs increase.
Its Budget demands extend beyond diesel. Logistics UK is also seeking reform of business rates on warehouses and freight infrastructure and wants logistics included within the British Industrial Competitiveness Scheme as operators become increasingly dependent on electricity for battery-powered fleets.
The RHA, meanwhile, is pressing ministers to reverse what it describes as a £428 million reduction in road investment, restore national funding for HGV driver training bootcamps and provide greater support for lower-carbon fuels.
The immediate focus for road operators, however, will be 28 October. Until the Chancellor sets the final rates, the 3p January increase and subsequent 2p rise remain the government’s default trajectory rather than a settled post-Budget policy.
