Features Editor Joe Wyatt spoke to Martin Devine, Managing Director Fueltek, to discuss fuel duty in relation to commercial transport.
What is the current situation regarding fuel duty and commercial transport in the UK?
In general, commercial transport users have got a raw deal when it comes to fuel duty. As the transport industry’s main raw material is fuel, the impact of fuel duty is felt in this industry more so than most others. Any other industry would receive government support in the form of grants or other initiatives to help individual businesses to thrive and promote overall growth. However, despite its impact on our industry, the Government cannot afford to lose the tax revenue that fuel duty provides. These financial pressures mean that the Government are loathe to relax fuel duty for commercial users.
There is a strong argument held by some that road transport is essential for the national economy. Even in this internet age where everything happens so quickly, everything needs to be delivered in some way. That means putting wheels on the road and making those wheels turn through an engine of some description. For the time being, those engines are still mostly using fossil fuels which come out of the fuel pump and are still taxed heavily by the Government.
Perhaps there could be a compromise; the Government already offer some rebates to off-road vehicles, like plant vehicles and cranes for the construction industry. Maybe they could extend those same fuel rebates into the commercial transport market to give commercial operators an advantage over general consumers when purchasing fuel.
What impacts would an increase in fuel duty have on the economy?
If fuel duty were to increase, the cost of consumer goods would rise somewhat due to higher transport costs. This obviously impacts the poorest in society the most, not to mention businesses. The idea that fuel duty is a social justice issue is a reasonable one; people in the public sector are being asked to cap wage increases to 1%, but if the Government increases fuel duty by some unknown percentage, an equal or larger increase in the price of consumer goods could exceed that.
Do you foresee an increase in fuel duty?
Successive governments have relied on fuel duty as an easy way to generate revenue. Without some resistance from the commercial transport industry and some good publicity of it, the Government would probably try to raise it every year. So, an increase in fuel duty is certainly not out of the question.
Despite previous governments encouraging the opposite, there is a push nowadays for consumers to purchase petrol cars instead of diesels. Why do you think that is?
I think this is due to the tremendous pressure placed on governments to meet their CO2 emissions targets. They are targeting vehicle emissions because they are easy to accurately monitor and measure. Also, the recent scandal over the manipulation of emissions data by Volkswagen has put the fear of god in politicians that the data they are using may be misleading. This is an important reason why the Government are discouraging the purchase and manufacture of diesel cars and engines respectively.
For whatever political and financial reasons they may have for doing this, diesel as a fuel is a very good product; it is easy to handle, its supporting infrastructure is in place and it has relatively low emissions compared to other fuels. There is still speculation over what the true environmental impact of the switch to electric vehicles will have. A more focused, practical strategy from the Government will be necessary.
For more information: www.fueltek.co.uk