The worst I've seen - Sunderland haulage chief calls on Government to reduce fuel duty as oil prices rocket
“The rising cost of oil is having a massive impact on the haulage industry and will inevitably lead to an increased cost of goods. We need the Government to look at reducing the cost of fuel duty to help businesses cope while the conflict in Iran continues”
The words of Alan Ferguson, executive chairman of Fergusons Transport, one of the region’s largest haulage companies which has a depot on Pattinson Industrial Estate in Washington.
Alan was speaking to the Echo as the RAC has announced petrol is up 25p (19%) on average since the war began whilst diesel has exceeded 190p (190.62p average) and is up 48p (34%) since the conflict began.
The decision of the USA and Israel to launch air strikes on Iran has seen Iran effectively close the Strait of Hormuz in the Middle East - one of the world’s biggest oil shipping routes - restricting the global supply of crude oil and pushing up prices.
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Whilst all motorists are feeling this impact at the pumps, those businesses which depend on petrol and diesel to operate are really feeling the pinch.
Alan said: “The price to fill up our wagons is on average currently around £450 compared to £300 during December to February - up 50% since the start of the conflict.
“This is the worst I’ve seen the situation for haulage companies - definitely worse than the oil price increase following the war in Ukraine.
“Fuel is usually around 25% of our daily operating costs, where as now it’s more like in the low thirties. The main cause is the restriction of oil supply from the Middle East, but it’s also being exacerbated by people panic buying at the pumps.
“The situation is having a significant impact on the haulage and transport sectors.”
Established over 100 years ago, Fergusons Transport hauls a “wide range of products” including parts for Nissan Sunderland, building insulation, and hospital equipment including MRI scanners.
Alan feels the increased costs experienced by haulage companies, will “inevitably” result in rising inflation as goods become more expensive.
He said: “Most haulage companies have a profit margin of around one to two percent. The only thing we can do is pass the additional costs on to our clients who will then have to pass the additional expense on to their customers.”
Despite today’s (April 8) announcement of a two week ceasefire, great uncertainty remains over the international supply of oil, and Alan has called on the UK Government to intervene and bring down the current rate of fuel duty to support businesses until the global price of oil falls.
He said: “The current fuel duty on diesel is 53p/litre. When you add on VAT at 20%, taxation still accounts for nearly half of what we are paying at the pumps.
“The current situation is having an even bigger impact on haulage companies in the North East. We’re quite isolated as a region and inevitably have to pay more to transport and travel to other parts of the country.
“If the Government reduced the current fuel duty whilst the conflict continues it would have a massive positive impact on the haulage and transport sectors as well as helping to control rising costs and inflation for the general public.”
Contact me at [email protected] if wish to let us know how your business has been affected.