Fuel duty price puts business costs under pressure

Deliveries: fuel cost rise

2p per litre increase in fuel duty from 1 September

THE expense of providing van delivery services, or tradesmen supplies, came under renewed pressure from today (1 September) with an increase in fuel duty.

The cost per litre of a gallon of diesel goes up by 2p per litre. When VAT is included, the actual cost is 2.3p per litre. The rise will increase by another 2.5% from 1 January when VAT returns to 17.5%.

The average cost of both petrol and diesel was 105p per litre in August, according to the AA August Fuel Price Report. The fuel duty increase means a litre of diesel fuel costing between 107p-108p per litre.

In terms of price per gallon that’s about £4.80 a gallon of fuel.

For self-employed traders and business trades, fuel duty has increased by 12% this year, says the RHA (Road Haulage Association); and by next April, duty will have risen by 16% in as many months.

“The duty increase is being imposed on top of a 4.5p a litre rise in the commodity price of diesel since the spring Budget – when the Chancellor predicted that energy prices would fall,” commented RHA director of policy Jack Semple.

The Federation of Small Businesses said the cost of fuel was damaging the competitiveness of the majority of small businesses.

The trade body SMMT (Society for Motor Manufacturers and Traders) says business van operators can save money by choosing the right van for the job.

SMMT advises that a smaller van fully loaded is cheaper to run than a a half empty larger van. When your business needs a larger van – just hire it for the few times it’s required.

Fuel Duty Rises