The logistics sector is urging the government to reverse a planned 5p per litre fuel duty increase
Logistics businesses are urging Chancellor Rachel Reeves to scrap a planned fuel duty increase as soaring oil prices pile further pressure on supply chains and wider inflation fears grow.
Business group Logistics UK said rapidly rising fuel costs, driven by disruption linked to the conflict in the Middle East, were already placing severe strain on transport operators and could ultimately push prices higher across the economy.
The warning comes ahead of an expected government support package aimed at helping businesses and households cope with mounting economic pressures.
Logistics UK is calling on the government to reverse plans to increase fuel duty by 5p per litre from September, arguing the move would provide vital relief for operators already struggling with escalating costs.
Ben Fletcher, chief executive of Logistics UK, said the sector was facing increasingly difficult trading conditions as fuel prices continue climbing sharply.
“Our members provide everything that every part of the economy relies on, every day,” he said.
Mr Fletcher said crude oil prices had risen above $110 a barrel, while the cost of filling a large HGV had increased by 31% over the past three months to almost ÂŁ1,000.
“With most logistics businesses operating on very narrow margins and unable to absorb this level of increase, we have made clear to government that the impact is likely to be higher inflation for everyone,” he said.
The organisation warned that rising transport costs would inevitably feed through into food prices, retail costs and wider supply chain expenses.
Logistics UK also argued that higher fuel prices had already increased Treasury tax revenues by around ÂŁ42 million since the end of February.
Mr Fletcher said reversing the fuel duty rise would provide “a welcome boost” for the logistics industry while also helping reduce inflationary pressure on consumers.
The group also warned that rising operational costs could undermine investment in lower-carbon technologies and progress towards net zero targets.
“With so little financial headroom, rising fuel prices mean logistics businesses are being forced to prioritise business-as-usual costs over investing in future growth and a transition away from fossil fuels,” Mr Fletcher said.
Logistics UK is calling for wider government support measures, including action on fuel duty, low-carbon fuels, electricity costs and business rates.
The organisation said additional support was needed to ensure supply chains could continue operating effectively while maintaining investment in future technologies.
“Our industry cannot survive ever-escalating costs,” Mr Fletcher said.
“It is time for the government to step in, to ensure we can still deliver for the wider economy for the long term.”
Logistics UK represents businesses operating across road, rail, air and water freight, alongside retailers and manufacturers reliant on the movement of goods throughout the UK economy.