Fuel represents a large proportion of the weekly operating cost for hauliers
The government has planted the seeds of an economic setback, industry leaders warn, after confirming fuel duty will rise from September 2026.
Logistics UK says the move threatens to unleash an “inflationary timebomb”, with Acting Chief Executive Kevin Green accusing the Chancellor of undermining the fragile economic recovery. “Instead of nurturing the green shoots of economic recovery, the government risks stamping them out,” he said in response to Rachel Reeves’ Budget announcement.
According to Green, the planned duty increase will pile “hundreds of millions in increased taxes” onto logistics firms, costs that will inevitably be passed on to households, businesses and drivers.
He cautioned that the rise will “fuel inflation across the economy”, arguing that ministers are overlooking how deeply logistics costs are embedded in everyday life — from food and medicines to construction materials and consumer goods.
Green noted that the sector already pays around £5.5 billion annually in fuel duty and contributes £170 billion to the UK economy while employing more than 8% of the national workforce. He said raising the tax burden “shows a disregard for a sector” central to the government’s own growth ambitions.
Logistics UK is urging the Treasury to reverse course swiftly. Failure to do so, Green warned, risks triggering inflationary pressure “right across the economy in the spring.”