Cost-of-living crisis: Further fuel duty cuts 'essential', declares Scottish logistics chief
Cutting fuel duty is “essential” to prevent further impacts on the cost of living, the head of one of Scotland's largest logistics and transport companies has said.
Andrew Malcolm, chief executive of The Malcolm Group – said transport and logistics companies were being “forced” to pass on rising fuel costs to their customers.
The warning comes as the average price of a litre of petrol at UK forecourts reached a new record of 183.2p on Thursday, according to data firm Experian.
That is an increase of 7.3p in just seven days. The average cost of filling a typical 55-litre family car exceeded £100 for the first time on Wednesday.
The RAC described the previous 5p duty cut announced by the UK Government in March as a “drop in the ocean” and stressed “more needs to be done” to alleviate the “enormous financial burden on drivers”.
The warning comes as figures published by the Office for National Statistics showed almost 80 per cent (77 per cent) of adults were worried about the rising cost of living.
Mr Malcolm said he believed cutting fuel duty for petrol and diesel was “essential”.
Asked if he would back calls for fuel duty cuts, Mr Malcolm said: “Absolutely. Through the Road Haulage Association, for years and years, we’ve been trying to get the Government to look at some form of rebate on the tax on fuel for the commercial market.
"Every penny we pay out we now have to force it on to our customers, who in turn have to pass it on to their clients and so it’s going to just flow onto the cost of living.
"There should be an essential users’ rebate, but the problem is the Government will only recognise our transport sector as essential workers in a time of crisis. After that we are not.
"The Government needs to sit up and take a good look at the important part the road transport sector plays in the whole of the UK economy.”
Mr Malcolm said the construction sector was probably the industry hit “the hardest” on legislation change around fuel.
He said: “I would suggest there are early signs right now that the construction centre is going into a slowdown because the cost recovery in that sector is getting harder and harder, which will in part drive a slow down of the economy as well.”
A “realistic and proper understanding” about the impact on the sector was needed from the UK Government, Mr Malcolm said. He also stressed a “real concern” was car park levies being introduced by local councils in Scotland.
The 24-hour business is reliant on its employees being able to access sites via car as many locations are outwith key public transport routes.
Other price records were set on Friday morning, with the average cost of a litre of diesel at motorway services passing the £2 mark for the first time ever (200.99p). Petrol at the motorway is also at another record of 197.18p.
Fuel prices have increased sharply because the price for crude oil, which is used to make petrol and diesel, has gone up.
However, industry groups claim “substantial cuts” can be made to counter this.
Neil Greig, policy and research director for IAM RoadSmart, said: “Even at £2 a litre, the Government still take 53p in duty and over 30p in VAT, so whilst they can’t do much about the high price of crude oil they could still make a substantial cut.
"We support calls for at least a 10p cut in duty or the removal of VAT – for a temporary period whilst prices are so high."
The introduction of a fuel watch scheme – similar to how Northern Ireland’s consumer council maps fuel prices – was a recommendation made by the group to the Government.
Simon Williams, RAC fuel spokesman said: “The 5p the Chancellor gave away in his duty cut in March has already been replaced by the 5p extra he is now making in extra VAT following the invasion of Ukraine just a month earlier. A temporary cut in VAT on fuel, or a deeper duty cut, are surely what is needed now.”
Downing Street confirmed earlier this week the Government was looking into a scheme that would “name and shame” petrol stations for not ensuring the 5p duty cut is passed on.
The Government’s department for business, energy and industrial strategy told The Scotsman they had been “clear in their engagement with fuel retailers the cut should be reflected in the price people pay at the pumps”.
A spokesperson said: “We continue to look at options to ensure companies are transparent and motorists are not overcharged.
"More broadly, the Competition and Markets Authority also stands ready to take action should there be evidence that competition or consumer protection law has been broken in the market.”