News
23/10/26
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
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