Put the brakes on fuel increase says NFU

The NFU has written to Treasury Minister John Healy urging the Government to delay the 2.42 pence per litre (ppl) increase in excise duty on gas oil (red diesel) that is due to be introduced in September this year.

Crude oil prices have recently risen to unprecedented levels, adding to the agricultural and horticultural industries' concerns over the planned increase in red diesel duty. The increase in the price of crude is already being reflected in prices at the pumps.

The Government has justified the latest duty increase, due to be implemented on 1 September, on environmental grounds.

NFU East Midlands regional director, Jack Ward said: "Farmers are still mystified why they have been singled out for such a huge increase in tax on red diesel. Last year 1.09ppl was levied and now this 2.42 ppl is on the cards; an increase of 50% when other fuels are being raised by a mere 3%.

"Increasing duty on red diesel will not lead to any significant reduction in use because agriculture is an essential user of fuel and farmers only use as much fuel as individual activities demand.

"Fuel is a significant part of farm overheads and consumption has been reduced as much as possible through management techniques. The impact of the fuel duty rise will be particularly strongly felt in late summer and early autumn as farmers enter the period of heaviest fuel use for harvesting and drying crops."

In his letter to the Treasury, NFU President Tim Bennett said: "The September increase in fuel duty already represents a significant hike in farm fuel costs. This, combined with the recent surge in the crude oil price is an unwelcome development in the farming industry's fragile recovery.

"We believe that any reductions in Government revenue from this delay can be readily offset by the increased revenue received from VAT resulting from the increased crude oil price.

"I am urging the Minister to delay implementing the intended increase in duty that we estimate will add well in excess of £15 million to the industry's annual fuel bill. It is well within the Government's power to mitigate fuel price rises by delaying the planned duty increase."