FUEL QUESTIONS AND ANSWERS
Q. Are we at record diesel fuel prices yet?
A. Unfortunately yes this has been the case for several weeks. On February 1st the UK
‘high’ was recorded at 133.38ppl inc vat compared with the previous highest price in July
2008 of 133.25ppl (source, RMI). By Thursday 3rd March Petrolprices.com recorded this at
136.13ppl as the national average. Whilst for hauliers buying in bulk the RHA weekly price
survey, taken on 4th March this reached 112.18ppl as an average ex vat price (134.62ppl
with vat added for comparative consumer reasons).
Q. What about back in 2000 when the country nearly ground to a halt?
A. Diesel fuel peaked around 70ppl ex vat or 85.1ppl inclusive.
Q. How much has diesel gone up since the start of 2010?
A. 19.4% in duty and commercial rises, for the public however this is more as VAT needs to
be considered too and so their cost has increased by 21.9% ( in January 2010 the RHA
average fuel price was 93.96ppl ex vat).
Q. How does the barrel price of oil compare?
A. In 2008 oil reached $142, the highest point this year for end of day price was $116.50
(Brent 02.03.11) – the reason we are paying more now even though crude is still cheaper is
because of increased duty (up by 8.6ppl), the addition of the Renewable Transport Fuels
Obligation (RTFO) which add just over a penny per litre for bio fuel content plus in 2008 we
had a stronger Pound exchange rate of 1.99. On 04.03.11 the exchange rate was to 1.62.
Q. How much revenue does the government make from fuel taxes?
A. Fuel usage in the UK amounts to 49 billion litres annually (24b petrol + 25b diesel). At
the new increased rate of 58.95ppl plus 20% vat this brings in £34.6 billion – that is £1.01
billion more than at the previous duty rate of 58.19ppl and 17.5% vat.
Q. Is the duty rate the same for petrol and diesel?
A. Yes, the duty rate for both Ultra Low Sulphur Diesel and Unleaded Petrol was equalised
at 50.35ppl in April 2008. Since then duty has increased by 8.6ppl or 17% and that doesn’t
included the vat. Other European countries typically apply much less duty to diesel
compared to their petrol rate. An example would be France where diesel duty is 42.8 cents
per litre compared to 60.7 cents per litre for petrol.
Q. How much to run a truck?
A. Trucks use a lot of fuel, in fact around a third of the running cost is fuel alone – a 44
tonne artic/trailer combination will use around 7.5mpg and a typically cover 70,000 miles a
year. To do that, the truck will use 42,439 litres (9333 gallons) at a cost today of £47608 -
ex vat.
Q. So what does a penny per litre rise mean to a truck’s operating cost?
A. For every penny increase that adds £424 a year to the operating cost – since October
2010 that has meant an increase of £6055 per truck per year relating to fuel (Oct 10=
97.90ppl, 4 Mar = 112.18ppl – difference therefore 14.28ppl x £424=£6055).
Q. October seems to be where the rapid rise in price of fuel started to occur, what in
percentage terms has the increase since then been?
A. Fuel itself has risen 14.58% in little more than 4 months and depending on the type of
operation fuel can be anywhere between 30-45% of whole vehicle running costs. Using our
standard model the cost of running a truck has increased by 4.8% in those few months
simply from fuel increases. Other costs have increased in that time as well and will shortly
be reviewed.
Q. I’ve heard diesel fuel is cheaper in other European countries?
A. Correct, Luxembourg is generally the cheapest European country with the UK being 42%
more expensive once tax and duty are applied. The table provided at the bottom gives a
comparison of prices in general once duty and tax are applied for a typical truck tank of
diesel – the table also lists the duty and vat rates applicable in each country (update 7th Feb
2011).
Q. How many trucks are operating in Great Britain?
A. There are currently 415,000 HGVs registered
Q. Will PPL be forced to add a fuel surcharge?
A. Unfortunately, YES!
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