While the US agriculture sector is still assessing the damage from hurricane Katrina, the global supply chain is beginning to feel the storm’s bite in the form of rising fuel prices.

Crude oil from the Gulf of Mexico amounts to 30 per cent of US production and with 95 per cent of the region’s oil production knocked out by the hurricane, prices are tipped to rise by 30 to 40 per cent.

The news is provoking alarm across all sectors and the spectre of fuel protests has once again been raised by campaigners in the UK. The protests in 2000 saw major fuel shortages and empty supermarket shelves.

Campaigners are now threatening protests for September 14, unless the government acts to cut fuel duty and take the sting out of prices which are soaring to around £1 a litre.

Freight bosses are also calling on the government to support the industry. Richard Turner, chief executive of the Freight Transport Association, said: “UK industry needs the relief of reduced fuel duty much more than the government needs the benefit of windfall tax income.

“Everything we consume and use is delivered on the back of a truck fuelled by diesel and the prospects for prices are presently grim. The transport industry needs government help without delay.”

Turner’s statement was made following news that UK bulk diesel prices have gone up by 12.6p per litre in the last year, 5.4p in the last month alone.

He said: “The chancellor must recognise the need to detach the way fuel duty is levied on commercial vehicles, a fundamental element of business operation, against duty paid on cars. It cannot be impossible for the UK government to provide some sort of support in the same way as has been provided by France, Belgium and Holland.”

One industry insider played down the impact on the fresh produce sector: “If history is anything to go by, the elasticity of fuel prices has no effect on consumption of fuel, or apples for that matter. The price of an apple might go up at the end of the day but people will still buy them.

“Of course, if they start picketing refineries and distribution centres that is a different story. Then we will all be in trouble.”

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