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Fluctuations in price causing 'havoc'

Haulier urges Chancellor to help stabilise fuel costs

Jerry StewartA haulage industry leader has called on the Chancellor to help businesses better plan their fuel costs by introducing a duty stabiliser that would remove damaging fluctuations in the price.

Jerry Stewart of Eagle Couriers says the unpredictability of prices at the pumps is “causing havoc” for heavy users of transport.

Amid rumours that George Osborne will increase fuel duty in next week’s Summer Budget, Mr Stewart has called for the Government to step in to help steady prices and enable firms to plan ahead with some certainty.

“The situation is simply becoming intolerable. We’ve already heard the AA and RAC complaining bitterly on behalf of motorists that fuel prices have risen at the same time that the price for a barrel of crude is dropping,” said Mr Stewart.

“It hits the transport, haulage and logistic industries even harder. Frankly, it is becoming impossible to plan ahead. It’s been great that prices dropped at the start of the year, but while the oil price has slumped, fuel prices have started to creep back up again.

“What’s most concerning for us is that many of our contracts are with the public sector. It becomes extremely difficult – verging on impossible – to plan for such contracts when fuel prices are fluctuating so greatly and there is no stability regarding the price.”

A 1p rise in fuel costs adds 60p to the cost of every full tank for the firm’s 100 vehicles.

Mr Stewart is calling on the Government to go a step further than it did by introducing its “fair fuel stabiliser” in 2011, when it scrapped the deeply unpopular fuel price escalator.

The “stabiliser” was intended to help smooth out the effects oil price rises by pegging associated fuel duty (the tax the Government collects) increases to the rate of inflation.

Mr Stewart said: “I sincerely hope Mr Osborne does not go back on one of the main pre-election promises so early in the term of office, by announcing this increase in fuel duty.

“There must be a better way to do this. Everyone appreciates that fuel prices will rise as the cost of oil rises. However, there is no way the public would accept weekly changes in their gas and electricity bills. Why should we accept it for petrol prices?

“We have seen how much the prices have increased since January, and this is only a short period of time, so it is difficult to legislate and control over a three year period. There should be an agreed mechanism in place, which ensures that when the price of oil rises, the tax we pay either decreases or at the very least remains the same.

“This may not solve rising fuel costs outright, but will go a little way in relieving some of the pressure felt by cash strapped businesses and families.”

In February the average price of unleaded petrol was around £1.08 but by April this had increased to around £1.13 with prices continuing to rise throughout May. Duty on unleaded petrol and diesel has been frozen at 57.95 pence per litre since 2011.

The next planned rise in duty is September 2015, the Office for Budget Responsibility (OBR) has said, however rumours have begun to circulate that this will be brought forward to next week.

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