The Freight Transport Association (FTA) has told the Chancellor of the Exchequer that his budget must abandon plans to increase fuel duty by two pence per litre from April 1. The FTA said that with the world price of oil now exceeding $100 (£50.64) per barrel, and forecast to rise further throughout the spring and summer, the imposition of a further cost increase will result in severe problems for both the UK transport industry.

Costs in the road transport industry are currently rising at an annual rate of 8.4 per cent for a 40-tonne articulated lorry and by 7.5 per cent for a smaller 18t rigid. This is well in excess of underlying inflation, which is running at 3.4 per cent. The proposed two pence per litre increase would be the second rise in six months and comes on top of a 12.5p per litre increase in product prices during 2007.

FTA director of external affairs, Geoff Dossetter said: “Diesel is the lifeblood of UK industry and the sky-high fuel duty level imposed on it already makes UK diesel prices the highest in Europe. Almost everything that we all consume every day is the product of a lorry journey and around a third of the cost of lorry operation is the diesel that those lorries consume.

“The Chancellor is planning to further increase the cost of those lorry journeys from April and this will hit the pockets of the whole population. He must recognise the problems of the transport industry, recognise the impact on consumers, and abandon his plan to take even more tax.”

FTA’s budget submission also called for the Chancellor to abandon plans to increase gas oil duty used to fuel railfreight, to freeze Vehicle Excise Duty levels for commercial vehicles, and to introduce a charge on foreign lorries working in the UK.