Consultant warns of fuel triple whammy
October 13th 2010 The logistics industry faces a triple whammy on fuel as taxes rise, oil prices are forecast to increase and tighter European regulations are due to hit home in a few years time.
Fuel duty rose by 1p in the pound on October 1. Citing Freight Transport Association predictions, Kirsten Tisdale, logistics consultant at Aricia added that sulphur bulk diesel prices could rise from 100ppl in this quarter to 105ppl this time next year.
Furthermore, Euro-6, which will demand a sharp decrease in NOX emissions and particulates released from fuel, comes into force from 1 January 2013, with newly registered vehicles required to be Euro-6 by 1 January 2014.
“At the end of last week, the government increased the tax on fuel again,” said Tisdale.
“That is a problem right now, along with the forecast increases in the oil market. But if you are budgeting or modelling logistics operations a few years out, the Euro 6 time-bomb will result in a triple whammy.
“The Euro regulations are not about carbon dioxide, but about reducing nitrous oxides and particulates, and FTA foresees a drop of about half a mile per gallon when Euro 6 is introduced or, put another way, a 5-6% worsening in fuel consumption. I saw no discussion of this issue, or the apparently random nature of some of the changes in mpg, in the DfT freight figures released fairly recently.”
In its Love Logistics report published this year, the FTA said: “The progressive tightening of emission standards for new vehicles has delivered huge environmental benefits.
“However, despite the combined efforts of the most innovative vehicle manufacturers in the world, these reductions have only been achieved at some cost to fuel efficiency.
“Truck operators find themselves between a rock and a hard place, meeting air quality standards, but placing an extra burden on themselves in terms of carbon.
“The law of diminishing returns suggests that the cost effectiveness of yet further reductions in emissions will be more difficult to justify, especially if these are achieved at the cost of greater fuel consumption.” More articles from Handling & Storage Solutions: | 
