BMF lobbies government on fuel hike

The Builders Merchants Federation (BMF) is lending its weight to the protest against the 2p rise in diesel duty planned for October.

BMF lobbies government on fuel hike

The BMF has voiced its concerns to the Chancellor of the Exchequer over the rising cost of diesel fuel duty and the adverse effect that the 2p rise in diesel duty planned for October will have if it is implemented.

As a major user of road transport vehicles, transport costs are second only to wage costs as the biggest operating expense for the builders merchant sector. Therefore, the BMF is lobbying the government to cancel the proposed rise.

BMF managing director Chris Pateman said, “Diesel fuel duty in the UK is some 50p per litre, twice the EU average of around 25p per litre. As fuel prices have risen tax revenues have massively increased.”

The BMF has urged the Chancellor to use this windfall – calculated by the British Chambers of Commerce to have amounted to £505m in the first six weeks of this financial year alone – to cancel the proposed rise.

A cancellation of the proposed rise will only keep the current status quo: alone it is not enough to mitigate the effects of the rising cost of fuel on the builders merchant. Increased distribution costs caused by fuel price increases are building up inflationary pressures in the building materials distribution sector where BMF figures show product price inflation is now reaching 7.6%.

Inflation in the UK building industry will feed inflation for the UK as a whole. Furthermore the rising cost of fuel is slowing the whole UK economy in general and on our sector in particular. BMF sales statistics show material sales to April ’08 to be declining by 2.2% on a year on year comparison.

Therefore the BMF has asked for:

  • The reduction of fuel duty by 25p per litre to give parity with the EU average.
  • Alternatively, recognition that building material distribution services are essential to the wider operation of the construction sector and members are granted a similar diesel fuel duty rebate to that given to bus operators.
  • About Fiona Russell-Horne

    Group Managing Editor across the BMJ portfolio.

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