The Road Haulage Association (RHA) wants the Treasury to introduce an Essential User Rebate for HGV, coach and van operators, arguing that fuel is an unavoidable business cost for commercial transport companies and that targeted support would be more effective than blanket measures.
The proposal comes ahead of the UK Budget on 28 October and as the current 5p-per-litre fuel-duty cut approaches its scheduled end.
Under the present timetable, diesel duty is due to rise from 52.95p to 55.95p per litre on 1 January 2027, before increasing again to 57.95p from 1 March. The Government has said final rates will be confirmed at the Budget.
The RHA is calling for those increases to be cancelled and for fuel duty to be frozen indefinitely. It is also opposing plans to link duty to inflation from April 2027.
The association estimates that restoring the full 5p would cost a typical HGV operator around £2,325 per truck each year. For a 20-vehicle fleet, that would amount to roughly £46,500 annually, based on the RHA’s assumptions.
Rebate would target commercial users
Unlike a general fuel-duty cut, the Essential User Rebate proposed by the RHA would allow qualifying commercial operators to reclaim part of the tax paid on diesel. The association has not yet publicly proposed a specific rebate rate or detailed how eligibility and claims would work.
However, it argues that similar systems already operate elsewhere in Europe. Ireland, for example, has a Diesel Rebate Scheme under which qualifying road transport operators can recover part of the tax paid on diesel. The RHA has also pointed to commercial diesel-rebate arrangements in France, Spain and Italy as evidence that such a system would not be unusual in European road transport.
There are precedents for targeted fuel support in the UK too. Eligible bus operators can receive support through the Bus Service Operators Grant, while the Rural Fuel Duty Relief scheme reduces fuel costs in certain remote areas.
Operators struggling to pass costs on
The RHA says fuel accounts for around a third of the cost of operating an HGV, leaving hauliers particularly exposed to sudden price increases. In its latest operator survey, 84.6% of respondents said higher fuel costs were reducing their profit margins, while only 10% said they were able to pass fuel increases on to customers in full.
The association has also warned that fixed-price contracts and resistance from customers frequently prevent operators from recovering additional fuel costs. The Government has already introduced several measures aimed at limiting the burden on road transport businesses.
The existing 5p fuel-duty reduction has been extended until the end of December, while most HGVs over 3.5 tonnes have benefited from an annual Vehicle Excise Duty rate of £1 since July 2026. The Treasury has previously argued that its fuel-duty and vehicle-tax measures provide substantial support for the industry, but has so far made no commitment to introducing an Essential User Rebate.
RHA also targets payment delays
Fuel taxation is not the organisation’s only concern. The RHA is also pressing for 30-day payment terms across the transport sector, saying long waits for customer payments compound the cashflow pressure created by high fuel costs. Operators have to cover fuel, wages, insurance and other expenses immediately, while payment for completed work can arrive weeks or even months later.
The association has repeatedly linked tight margins and cashflow pressures to the continuing number of haulage company failures, although fuel costs are only one of several factors affecting insolvencies. The RHA has been campaigning for an Essential User Rebate for several years and renewed its push earlier this year as diesel prices rose sharply.
With the October Budget now approaching, the immediate question for operators is whether the Chancellor will cancel the planned fuel-duty increases — and whether the Government is prepared to go further by creating a permanent rebate specifically for essential commercial road users.
