Warning over rise in fuel duty

The Freight Transport Association (FTA) has warned that an increase in fuel duty could cause serious consequences for several transport firms as well as motorists.

The Government's fuel duty rise, which adds another 1p to the cost of a litre of petrol and diesel, will come into effect on Friday.

Describing it as a "smash-and-grab approach" by Whitehall, the FTA said the increase may adversely affect struggling transport companies.

FTA chief economist Simon Chapman said: "Diesel is an unavoidable expense and accounts for a third of the costs of running a truck. Successive above-inflation tax hikes since 2009 mean the freight industry is shouldering a disproportionate burden in narrowing the public sector deficit.

"With another rise due in January and above-inflation rises set for the next three years, many businesses hit hard by the recent recession will feel like they are on borrowed time."

He added: "The price of oil is the highest it's been for three months and is set to rise further as we come into the autumn peak period of oil demand. With economic recovery still so fragile, now is not the time to compound the problem with artificial price hikes.

"With the duty hike affecting petrol too, the Treasury will net an extra £500 million a year in total from all road users."

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