Fuel duty has risen for the second time in five months and may push many businesses already struggling with the economic downturn over the edge, according to the Freight Transport Association (FTA).

The FTA is warning of a sharp increase in insolvencies and job losses in the logistics sector in the next few months.

Insolvencies in the logistics sector have already shown a marked year-on-year increase and the FTA fears that this steady flow of firms going out of business will become a ‘deluge’ in 2009.

The number of HGV drivers claiming Jobseekers’ Allowance has risen by 236 per cent and the sector is bracing itself for further job losses.

Theo de Pencier, chief executive of the FTA, said: “[The fuel duty increase] is the latest in a shower of hammer blows dealt to the logistics sector by the government. What they are saying by their actions is that they don’t care about the more than two million people up and down the UK who work in this sector and keep the economy moving.”

The FTA is also fearful that the government may further affect the industry when the Chancellor presents the Budget on April 22.

“[If there are further increases] they are as good as signing the death warrants for some businesses and putting yet more workers onto the dole queue. At a time when jobless figures are already sky-rocketing, the government needs to understand that such actions will only add to them - and they will have been responsible,” said de Pencier.

Last month, the FTA, alongside its partners the British Vehicle Rental & Leasing Association, the Federation of Small Businesses and PetrolPrices.com, launched the Every Penny Counts campaign, urging the government to rethink its plans to increase both fuel duty and the fees levied by the Department for Transport’s executive agencies.

But, it was announced last week that test fees levied by the Vehicle & Operator Services Agency (VOSA) would increase by nine per cent. While FTA continues to resist calls from some parts of the logistics sector for direct action, it concedes that frustration with the government is high.

“While we would never advocate - or support - direct action, we fully understand the frustration felt by those in the logistics sector. That much of the damage is being done by our own government only makes it worse,” de Pencier concluded.