Taxi drivers in London are queuing rather than driving in search of passengers due to soaring diesel prices. Steve McNamara, general secretary of the Licensed Taxi Drivers Association, said “sky-high” fuel prices were having a major impact on the drivers of the 10,000 diesel-powered black cabs on the capital’s roads.
Latest figures from data firm Experian Catalist show the average cost of a liter of fuel has reached 161p on UK forecourts. Average petrol prices are also at a record high of 155.62p per litre. Mr McNamara told the PA news agency that the cost of diesel has risen by around 25% since 2020.
“Fuel is the biggest part of your daily running costs,” McNamara said. “If your running costs go up 20-25%, it starts to bite.
“What we’re seeing is more and more taxis looking to park in the rows. They’re trying to avoid moving around.”
Transport for London, which regulates black cabs in the city, is currently considering allowing taxi drivers to raise their fares. Mr Namara said soaring diesel costs would force the trade to seriously consider accepting a potential offer to raise prices for the first time since 2020.
“We actually owe something more than 10%, but there’s no way we’re going to take that in the current economic climate and have everyone come back from the pandemic,” he explained. “Having said that, we have to consider whether we are going to accept a (smaller) increase given the massive increase in (diesel) prices.”
Oil prices have soared on concerns about the reliability of supplies amid the war in Ukraine. The price of a barrel of Brent crude – which is the most commonly used way of measuring the price of oil in the UK – hit US$139 on Monday, its highest level in 14 years.
Carriers are warning they will be forced to raise fees to meet rising fuel bills, which will have a ripple effect for consumers. Rod McKenzie, chief executive of the trade body Road Haulage Association, called the spike in the cost of diesel “dramatic”.
He said: “If hauliers have to pay more for their fuel, they inevitably have to charge customers more. “I suspect that will mean higher prices on anything delivered by truck, which frankly is 97% of everything we get into Britain.”
Typical industry profit margins are just around 3%, so recent increases in fuel costs “have the potential to wipe out that profit,” McKenzie said.
“Every member I spoke to in the past week flagged this as the number one critical issue they face in their business. I cannot underestimate the impact this has on day-to-day transportation operations and transport operations in general.”
Mr McKenzie said the government ‘absolutely had to do something about it’. Measures he wants to see announced include extending the fuel duty freeze for two years and postponing for 12 months changes scheduled for next month regarding the use of untaxed red diesel.
RAC fuel spokesman Simon Williams said many older motorists will “find it difficult to comprehend” the price of petrol rising above £7 a gallon. He continued: “These increases are unprecedented and will unfortunately hit homes and businesses hard.
“It is therefore vital that the Chancellor acts quickly to limit the damage by reducing VAT to at least 15%, which would save drivers 6.5 pa liters and bring the average price of unleaded to less than 1 £.50.”
VAT is currently levied at the rate of 20% on petrol and diesel. Ryanair boss Michael O’Leary predicted last week that several airlines would hit passengers with fuel surcharges due to rising costs.
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