FTA joins calls to halt the fuel duty rise

The FTA has recently joined the RHA to request the government to discard its intended above-inflation rise in fuel duty in its submission prior to the pre-Budget statement. Simon Chapman, the chief economist for the FTA, dismisses the government’s planning for the fuel duty escalator as “green tax”, saying that it is nothing more than just a “revenue raising tool” in a region with “comparatively inelastic demand”.

The FTA said that since 1993, the fuel duty has increased to 56.2p/litre, which is 21p more than it would have been increased at the same rate as that of the inflation. Given the progressing recession, halting the escalator could now be imperative for the survival of some companies.

The FTA submission said that the government imposes fuel duty rise with negligible regards to the impact it will create on the economic viability of the freight sector. It also believes that increasing fuel duty does nothing to motivate fuel-efficient practices.

As an alternative, the FTA wants the Treasury to open negotiations on decoupling business from fuel duty rises related to incentives based on reductions in the CO2 emission. The FTA also said with the expected growth in economy soon, the freight activity will also increase. Government can also make effective use of fuel duty as CO2 abatement lever, by decoupling the duty of motorists from the ones that is used by businesses.