Major trunk routes into London will be brought to a virtual standstill this morning as truck drivers protest against spiralling diesel prices, claiming that it now costs them around £1,000 a week to fill their tanks.
At the same time the Freight Transport Association (FTA) has called on the government to cut diesel duty immediately to the EU average of 25 pence per litre to alleviate business cost pressures and inflation in the wider economy.
Diesel costs have risen by 34% in the last year and by 15% (14 pence per litre) since the beginning of the year, the FTA pointed out. It estimated that fuel will rise by another four pence a litre in the coming weeks as the most recent rises in world oil prices filter through into the selling price.
Fuel represented over a third of the costs of running a truck, claimed the FTA. With haulage margins often only 2-3%, there is no room for absorbing this input cost rise, it added.
Simon Chapman, FTA’s chief economist said: ”The government cannot continue to stand on the touchline and simply wring its hands over the spiralling cost of fuel. It can do little to influence the world oil price, but reducing the duty on diesel is within its gift.”
These costs are likely to filter through to increase the cost of food and drink in stores. The Confederation of British Industry (CBI) last week predicted that the price of manufactured goods would rise steeply over the coming months, as rising oil prices drive up costs. In its May industrial trends survey, 36% of manufacturers expected to put up prices up over the next quarter, compared to just 6% who said they would fall.
The CBI’s chief economic adviser Ian McCafferty said: “It is clear from the pricing data in the survey that manufacturers are really feeling the impact and having to pass their increasing costs on.”