Fuel price fall to reduce pressure on London firms

July 14th, 2012

The pressure put on London businesses by soaring fuel prices has eased in the last couple of months, according to the AA.

Petrol prices have dropped by more than 4p a litre for the second consecutive month, the motoring group said, which represents a decrease not seen since prices slipped in late 2008.

But the AA Fuel Price Report shows that drivers of diesel vehicles, which many businesses run, could have experienced pump prices much nearer to petrol’s for the first time in two years.

Transport secretary Justine Greening’s call for fuel price transparency may have helped the prices tumble, the AA said.

Since mid-May, average UK petrol prices have dropped by 4.63p a litre from 138.4p to 133.8p, while diesel prices have fallen approximately 5p a litre from 144.3p to 139.3p.

However, it warned that fuel duty is due to go up by 3p a litre at the start of August.

Road Haulage Association spokesperson Kate Gibbs has called on chancellor George Osborne to scrap the planned hike in fuel duty to help businesses.

“Whether fuel goes up or down fuel duty is a constant, so we are our campaigning our socks off, trying to get members to talk to their MPs to push the point we cannot see any further increase in fuel duty, certainly not a massive 3p.

“At the moment it is 138.9p for a litre of diesel, that’s the average pump price, but of that 57.95p is fuel duty so we would be seeing over 60p a litre as fuel duty.”

Gibbs said each penny increase in fuel duty amounted to a £650 rise in the cost of running a vehicle for its average member, so Osborne’s planned rise would see the cost of running a vehicle go up by close to £2,000 a year.

As the average member has seven to 10 vehicles in their fleet, this could mean a fuel bill increase of around £20,000.

“When fuel leaves a refinery fuel duty goes on, when it leaves the pump VAT goes onto it, so already it is a tax on a tax and the same can be said for alcohol and cigarettes.

“The different is we can choose if we smoke or drink but if we want to get from A-to-B and see reasonably-priced goods in supermarkets we have to pay for it.

“But the more we pay the more we will see supermarket prices go up, because when the price of fuel goes up, it goes up through the supply chain.”

Fuel price fall to reduce pressure on London firms

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