The Government’s current fuel tax policies could directly result in the Treasury missing out on up to £1.2 billion tax revenue as well as jeopardising the UK’s important and petrol forecourt and haulage industries, according to RMI Petrol.
With the growing number of high performance cars, trucks and vans on the road, diesel has overtaken petrol with a 55% share of UK road fuels, hitting a recent high of 133.38 pence per litre on February 1, which exceeded the previous record high of 133.25ppl in July 2008. This further widens the gap in diesel prices between the UK and the near Continent, for example diesel prices in Luxembourg were 30% lower at the end of January.
In 2010, the Port of Dover and the Eurotunnel combined saw over 3.3 million truck movements. Technological and design efficiencies have resulted in many HGV’s being fitted with enlarged tanks ranging from 500 to as much as 1,500 litre capacity to take advantage of the low duty rates and prices prevailing in France, Belgium and Luxembourg. As an example, Scania has recently launched its new “R”-series offering 1500 litre tanks on the 4 x 2 tractor range. At an average 8.0mpg, this gives the haulier a range of over 2,500 miles – equivalent to two round trips from Dover to Edinburgh.
RMI Petrol believes that with 50% of this traffic inbound, over 1.5 million trucks fill their tanks with cheaper diesel at truck stops on the near Continent before crossing to the UK. Assuming an average of 1,000 litres per vehicle, UK forecourts and truckstops will miss out on gross margin accruing from 1.5 billion litres of fuel sales and ancillary shop items. The Treasury could be missing out on approximately £1.2 billion in tax revenue from duty and VAT at 80ppl.
With foreign trucks paying no vehicle exercise duty, no road toll charges, minimal VAT on fuel and significantly lower fuel costs they become an attractive alternative to UK hauliers who are left unable to compete.
Brian Madderson, chairman of RMI Petrol said:
“This is another example of a Government own-goal. Its fuel tax policies are directly contributing to a reduced tax opportunity for the Treasury and misery for hauliers and forecourt owners alike, including our important motorway service operators.
“We strongly urge the Government to re-assess their fuel tax policies, in particular the planned duty escalator in April which would increase prices by a further 5.0ppl. This action must be taken to put a halt on the number of businesses in these industries going bust and to stop the gift of economic and fiscal competitive advantage to our European friends.”