Government inflation targets damaged by fuel duty rises, says FTA 17 February 2010
The Government has dealt itself a poor hand, having revealed that one of the largest culprits for the rise in inflation last year was fuel costs, Says the FTA,
FTA director of communications Jo Tanner believes the rise was exacerbated by successive, above-inflation fuel duty rises.
"Inflation has risen largely off the back of the rising fuel costs of transporting goods and services. Fuel accounts for over 30% of overall transport costs, and these costs trickle down to the services and businesses that rely on the logistics sector simply to run," she says.
"It is anathema, then, to increase the tax imposed on the cost of a tank of diesel during a recession, especially when the actual price of a barrel of oil has doubled. Yet this is precisely what the Government has done and is committed to doing in the future," she adds.
The largest influence on the upward trend found in the Consumer Price Index annual rate came from transport, where the price of fuels and lubricants rose by 2.2% – a record rate of growth for a December to January period.
Says Tanner: "The cost of oil has doubled in the last year, placing an increasing burden on FTA members, yet the Government continues to add to this through more and more hikes in fuel duty. This obsession with raising fuel duty has blown up in the Treasury's face, pushing their coveted inflation targets beyond reach."
Freight Transport Association Ltd
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