Fuel cost increases will hit hard, warns Framlingham Farmers

The increases in duty on gas oil and derv announced by the Chancellor in his Pre- Budget Statement this week will add £237,500 to the cost of fuel purchased by Framlingham Farmers Members during 2007.

The farmer-owned co-operative, which purchases over 21 million litres of fuel annually on behalf of almost 600 Members in East Anglia, the North West and South East of England, says that whilst, in isolation, the 1.25 pence/litre (ppl) rise in tax on gas oil might not sound very much, the increase from 6.44ppl to 7.69ppl represents a rise of 19.4%. This will raise an additional £200,000 for the Exchequer from the 16 million litres that Framlingham Farmers Members purchase annually, while the 1.25ppl increase on the three million litres of derv which Framlingham Farmers purchases for its Members will raise a further £37,500.

Graham Aldrich, Assistant Purchasing Manager, comments: "The Budget provided an excellent opportunity for Government to demonstrate that it is serious about developing alternatives to fossil fuels and to encourage the fledgling bio-fuels industry in the UK. Unfortunately, it undermined its green credentials by choosing not to do so.

"The increase of 1.25ppl was also applied to bio-diesel and bio-ethanol, raising the level on these products from 27.1ppl to 28.35ppl, which will do nothing to encourage either the young industry that is developing around them in the UK or farmers who face increasing pressures from global competitors. Given that world demand for energy is increasing rapidly, the UK is already falling short of its target for renewable energy under the Renewable Transport Fuel obligation (RTFO) and it has the lowest bio-fuel incorporation level in Europe that must be regarded as a missed opportunity."