2p fuel duty rise ''will impact economy''

The government''s plan to increase fuel duty by 2p in the pound will have a negative impact on the economy, a drivers'' group claimed today.

According to the Road Hauliers Association (RHA), levying the extra tax on lorry drivers would result in higher prices – driving up inflation from what are already 16-year highs.

This is because transportation costs provide a relatively high proportion of the price of consumer goods, especially food.

Despite the RHA''s comments, recent figures from the AA have shown that fuel prices have retreated recently, in line with wholesale costs.

After hitting an all-time high of $147 in July, barrels of crude oil for future delivery now cost less than $70.

Nevertheless, Jack Semple, director of policy for the RHA, suggested that the rise in duty would place an excessive financial load on hauliers.

"We are very keen for the government not to go ahead with the fuel duty increases that are in the pipeline," he commented.

"[The high fuel duty rate] is something which is obviously a burden on the cash flow of British hauliers and it is a cost which they have to pass on to British businesses and to their customers."