Key transport services in the UK could be cut due to massive rises in the cost of fuel, a transport group said today. Coach operators have said record diesel prices could force cuts to services including school transport, while hauliers warn rising fuel costs are pushing hundreds of firms out of business.
Diesel tops £2 a litre
Average UK diesel prices have rocketed in recent months and topped £2 a litre for the first time because of disruption to global supplies caused by the US-Israeli war against Iran and the conflict between Russia and Ukraine. Last week, the UK and other leading G7 nations agreed to release 100 million barrels of fuel and oil from emergency stocks amid surging prices.
Alison Edwards, the director of policy at the Confederation of Passenger Transport (CPT), told the Guardian that the cost of fuel had “surged this year to unsustainable levels, pushing coach operators’ already tight margins to breaking point”.
“It is time for urgent action,” she said. “Without intervention, soaring prices will mean difficult decisions on the availability of services, including home-to-school transport, and the viability of businesses.”
Hauliers at breaking point
Edwards said 85% of independent coach operators are family businesses, and called on the government to provide temporary support with the cost of diesel, adding that the industry “needs help”.
Hauliers have described the cost to their businesses as “devastating” and say it now costs £350 a week more to fill up a lorry. They have called on the UK government to scrap any planned fuel duty rises in January, March and April and to introduce an essential user rebate for coaches, lorries and vans.
Richard Smith, the managing director of the Road Haulage Association (RHA), said the haulage sector was under similar strain. “Businesses in our sector operate on slim profit margins, typically about 2%, so the continuing high fuel costs are a huge challenge for us.”
“It’s just unsustainable,” he said. “If haulage, coach and van operators can’t pass these costs on, they struggle, and we’ve seen hundreds of transport businesses going bust already this year.”
Industry calls for action
Speaking about the rebate, Mr Smith said: “It’s happening elsewhere. Spain, France and Italy already give commercial vehicle operators a diesel rebate. It’s about time we caught up.”
More than 160 offshore oil workers are considering strike action that their union claims could “severely disrupt” UK fuel supplies. The Unite union said workers at oil and gas operator Apache have backed strike action in a pay dispute. Unite said the strike could begin this month and would include seven Apache assets associated with the Forties and Beryl oil fields, and could lead to the entire Forties pipeline system going down.
Fhaheen Khan, senior economist for Make UK, a group representing manufacturers, said: “The debate around diesel reserves highlights a broader challenge facing manufacturers: the need for reliable and affordable energy supplies.”
“Businesses can cope with many pressures, but persistent uncertainty in global energy markets feeds through into costs across supply chains, logistics and the wider economy. That’s why strengthening the UK’s energy security is so important for long-term competitiveness. This should include making the most of domestic energy sources where appropriate and reducing manufacturers’ exposure to volatile global markets.”
He also said the Government could take immediate steps to reduce energy costs for manufacturing firms by removing policy levies from electricity bills – meaning charges that pay for schemes like energy efficiency.
