The news that supermarkets have been cutting their prices on petrol has been a relief for everyone, today four of the UK’s leading supermarkets have revealed that they will be reducing the price of diesel as well which has been described as ‘good news for the industry’ by the Freight Transport Association (FTA).
The price of diesel at the pumps will be below £1 a litre for the first time since 2009! Todays cuts reflect the further falls in oil price, which is at its lowest for 11 years, UK Brent crude oil is currently trading at just below $38 (£26) per barrel, which is 35% less than what it was trading at last year.
Why is it good news for the industry?
For major hauling companies running costs of vehicles represents around a third of annual operating costs, therefore if fuel prices continue to fall, so will the operating costs of the company meaning that the net profit of the company can increase profits, allowing the industry to boom. The industry is already growing, a recent report showed that the number of active limited companies in the industry has increased from 21,245 to 28,510, thats a staggering 34% in just 11 months.
FTA’s members have reported that the high price of fuel is their number one concern; being bad for businesses, hauliers and road users, and can have a devastating impact on their customers and ultimately everyone through the prices on the shelves. And the FTA Deputy Chief Executive James Hookham had this to say about the cuts “We need to see the wider fuel market become more responsive to ever lower oil prices. Today’s announcement by leading supermarkets is good news for commercial vehicle operators.”
Who is the real winner?
Mr Hookham added: “Never forget that at £1 per litre – 60p is fuel duty and about 16p will be VAT, so the biggest winner is the Chancellor. We need to see the Government helping businesses at these uncertain times with a further reduction in fuel duty in the Budget this March.”
Members of the FTA can take advantage of the cuts further by using the FTA Fuel Card – designed to allow users to benefit from large cost savings through discounted fuel prices and interest-free credit