Road fuels

Q&A: HGV fuel costs up by over a quarter: Logistics UK

Q&A: HGV fuel costs up by over a quarter: Logistics UK

London, 23 October (Argus) — Logistics UK outlines the increasing fuel costs borne by its members, who make up around half of all lorries on British roads, and how increases in fuel prices are being passed on to customers. But hauliers still see structural problems preventing them from electrifying fleets in the face of higher fuel costs. Its chief executive Ben Fletcher spoke to Argus , and edited highlights follow. What is Logistics UK's call to action in the context of the fuel price crisis facing its members? The Middle East conflict has impacted logistics and supply chains significantly, pushing up the price of fuel and increasing costs associated with managing supply chain disruptions. Since the conflict broke out in February, filling up an HGV has risen from around £750 to well over £1,000, and may go even higher. As logistics costs are embedded in everything we buy, from food and medicine to construction materials, increased costs for businesses directly translate into higher prices for consumers and communities. To reduce the risk of an inflationary impact and drive growth, Logistics UK is urging the Chancellor to maintain the current rate of Fuel Duty and the 5p cut and confirm this will continue into next year. The logistics sector already pays over £5bn a year in Fuel Duty, and even a 1p rise would cost £82.97mn. We are also calling for the reform of business rates, a significant fixed cost for the sector, and explicit recognition of logistics in the British Industrial Competitiveness Scheme. Doing so will be a significant step towards addressing the UK's high electricity rates, which will become more important as the decarbonisation transition gets underway. High rates risk dissuading operators from switching to electric fleets and must be addressed urgently. How have Logistics UK members been reacting to the rise in fuel prices? Have commercial operations had to adapt, and have driving behaviours changed? Has this meant that ultimately fewer miles are being driven? The logistics sector is resilient. Even as fuel prices have surged, it has continued to maintain customer service reliability and ensured the delivery of essential goods. Some businesses have responded to the rise in prices by adapting their procurement strategies and monitoring the market more closely. However, as logistics businesses operate on narrow profit margins, and any increases are likely to be passed onto customers, an increase in fuel prices results in higher prices for everyone. Beyond rising prices, are members experiencing any problems obtaining diesel, and how prepared are operators for a physical supply disruption or rationing? The primary issue with fuel is one of price, not supply. The government has reassured industry that the UK benefits from a strong and diverse security of fuel supplies, that it is monitoring stocks and sales closely and that production and imports are continuing across the UK as normal. The government has also confirmed that contingency planning in this area is well established, and that it has a range of measures it can use in the event that supply chains are disrupted. Logistics UK has stressed the importance of timely and clear communication with the sector when required. And are members changing how they buy fuel, for example through longer-term contracts, bulk purchasing or hedging, to reduce their exposure to price volatility? Businesses are adapting to volatile fuel costs through measures including fuel surcharges, more frequent monitoring of fuel prices and lead times and passing additional costs on to customers where possible, although not all businesses have the capacity to do so. But the conflict is not over, and the logistics sector will have to continue managing fuel price volatility, which makes it essential that the government maintains the current rate of Fuel Duty and focuses on keeping the cost of doing business down. Is Logistics UK aware of any fleet operator rationalisations or closures among its own members or elsewhere in the industry because of rising fuel costs? What percentage of overheads do fuel costs now represent? The slim margins the logistics sector operates on make this a very challenging time. Fuel represents one third of a business' operating costs, so increases in fuel drive up overall operating costs. What movements towards electrification has Logistics UK seen among its members, and does the group encourage them to consider integrating electric-powered vehicles into their fleets? The logistics sector is committed to decarbonisation, with operators making significant investments in battery electric vehicles. The light commercial vehicles (LCVs) segment has been particularly successful during the transition, registering 1.17mn on UK roads in 2024, a 34pc increase in the last decade. Major investments in charging infrastructure for electric HGVs has led to the opening of major hubs this year available for the public, alongside dedicated charging at businesses' depots. The first electric HGV crossed the English Channel on a freight train this year, demonstrating its operational viability over long distances, and how eHGVs can play a greater role in the movement of goods between the UK and EU in a safe, sustainable and efficient way. However, major barriers remain that are impeding progress. According to Logistics UK's decarbonisation survey, conducted in 2025, nearly 80pc of respondents are not confident that the government's phase out dates for diesel LCVs and HGVs will be met. This is due to barriers such as insufficient charging infrastructure, long grid waiting times and the absence of a co-owned industry and government roadmap that outlines clear timelines for the transition. Any decarbonisation approach taken will need to recognise the multimodal nature of the logistics network, as different transport modes are facing the same challenges of cost, technology readiness, infrastructure delays and fuel availability. Business group Logistics UK champions the logistics sector, the backbone of the UK economy and global trade, providing a unique, authoritative voice for its members. As the only trade association representing the whole industry, it supports more than 22,000 members, operating in road, rail, waterways, sea and air freight, in ports, airports and warehousing, as well as the customers of freight services such as retailers and manufacturers. The group delivers industry representation, services and thought leadership to support a sector that is critical to economic growth, employing 8pc of the UK workforce, contributing £175bn in annual GVA and enabling over £1 trillion of international trade. By George Maher-Bonnett Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.