Facing a significant £22 billion gap in public finances, the Labour government is reportedly considering an increase, potentially reversing the 5p cut introduced in 2022. Analysts speculate a potential 10p increase per litre, through a reverse in the 2022 cut and an additional increase of 5p per litre, which could generate around £5.5 billion annually, although market expectation is a rise of 7p per litre delivering around £3.85bn a year to the Treasury.
The rise is expected following extensive warnings from the Prime Minister that the Government’s first Budget in October is going to be “painful” with people having to accept “short-term pain for long-term good”.
In the run-up to the General Election, Sir Kier Starmer refused to rule out a fuel duty increase.
Craggs Energy Group companies Okehampton-based Moorland Fuels and Calderdale-based Craggs Energy are among those who have reached out to their business customers, urging them to get their orders in ahead of the budget.
Take action now
To combat what could be a very painful shock for businesses that buy their fuel in bulk – including hauliers, agricultural contractors, farmers operating agricultural equipment, and companies that run fleets of vehicles – the distributors are advising businesses to take action now by ordering fuel deliveries ahead of 30th October.
Matthew Crockett, Group Managing Director, explains: “Businesses that order early will be able to avoid what we expect to be a painful uplift in fuel duty, and the potential for last-minute panic buying, which could see many paying more for their fuel than they need to.
“The key is to ensure that deliveries arrive before midnight on 30th October, after which they will be subject to any fuel duty increase announced in the Budget. To do that with certainty businesses will need to plan ahead and order early.”
Matthew Crockett adds: “Our worry is that many businesses and farms will exceptionally be busy at this time of year. For them it could be all too easy to fail to order fuel in good time, costing them dearly. We want to help avoid that by getting the message out there so that businesses order ahead to avoid what could otherwise be a very expensive mistake.”
“At a 10p/litre increase in fuel duty, businesses could face extra costs of hundreds or even thousands of pounds. Some of our larger customers, who typically order 18,000 litres of fuel, would see a £1,800 increase on orders arriving after midnight on 30th October.”
Image credit: Moorland Fuels