Clock ticking on plans to hike up fuel duty in March

Plans to hike up the duty on diesel and petrol fuel by a staggering 23% – or around 12p per litre – in March 2023 have been unearthed in a document from the Office of Budgetary Responsibility (OBR).

A paragraph in the OBR’s recent Report on Fiscal Responsibility mentioned the proposal, which “would be a body blow to the logistics industry if introduced” according to Logistics UK.

Specifically, the OBR report said “the planned 23 per cent increase in the fuel duty rate in late-March 2023” would put an extra £5.7 billon in the government’s pocket.

“This would be a record cash increase, and the first time any government has raised fuel duty rates in cash terms since 1 January 2011,” the report added.

Alarmingly, the move wasn’t mentioned by chancellor Jeremy Hunt in last year’s Autumn Statement – leading to fears it’s being sneaked in under the radar.

The proposal would put an additional £4850 onto the cost of running a 44-tonne truck, according to Logistics UK calculations.

This would bring fuel duty costs to a total of £26,246 per vehicle before the cost of fuel itself, it said.

A small haulage firm with seven HGVs would have £34,000 added to annual operating costs if the duty rise were to be introduced after March 2023, LUK estimated.

“Although outlined in the Spring financial statement, the fact that the detail of this policy was hidden in the body of the OBR Report… indicates the government was hoping to avoid scrutiny on the topic,” said Logistics UK boss, David Wells.

“We are seeking urgent clarification as to whether the duty rise will be implemented as planned,” he added.

So we’ll all be keeping a close eye on the Spring Budget, which will be announced on March 15.