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In recent weeks, bulk fuel prices have spiked by 16.25% due to the conflict in the Middle East. When fuel prices rise, the impact is immediate, and haulage firms feel it the deepest. For the transport industry, the situation is serious. Fuel is the lifeblood of distribution, so when a price hike hits, the whole supply chain is vulnerable to cardiac arrest!
This is why the RHA is calling for action: “Our members are operating on thin margins. Any fuel cost rise is a threat to the future of businesses in the supply-chain, the coach sector and the wider economy. We’ve asked to urgently meet with the Chancellor so we can discuss why we’re calling for an immediate fuel duty cut, a temporary cut on fuel VAT, and mandatory 30-day payment terms to address cash-flow challenges in our sector.”
The Chancellor may be wise to heed the RHA’s advice because the effect of a rise in fuel costs reaches far beyond the haulage sector. With 81% of UK freight being transported by road, a big increase in diesel costs means price increases and inflation across the board, which means it’s everyone’s problem.
For haulage firms working within low margins, a long conflict with sustained high fuel prices means cost pass-through is inevitable. This is particularly concerning given the current precarious economic backdrop. As the RHA’s Managing Director Richard Smith explains, “When fuel prices spike, the impact is felt on supermarket shelves and household budgets across the country.”
Haven’t we been here before?
Sadly, the haulage industry is no stranger to the ramifications of geopolitical conflict. The question hanging over our sector is, “Does this mark a return to the conditions of 2022?”
The scale of the shock has (so far) not been as bad. The initial wholesale price increases from the 2026 Middle East crisis have not yet reached the levels of the 2022 Ukrainian conflict due to the different economic contexts and supply dynamics. But the situation is volatile, and the global energy supply remains precarious.
Both wars are raising fears of supply shortages, either due to physical damage to infrastructure or disruptions to major shipping routes. In the current Ukraine war, Russian oil is largely being redistributed to other markets, whereas the Middle East conflict risks physically cutting off Gulf supplies from the global market entirely.
This issue has been exacerbated by the 2022 ban on Russian oil, because the UK and Europe are currently heavily reliant on Middle Eastern diesel. The Strait of Hormuz closure has cut off this primary replacement source, causing UK diesel prices to jump by 20p per litre in just three weeks. Even a ceasefire would not immediately restore flows, and experts estimate it could take months to clear mines, repair infrastructure, and restore maritime insurance. In the meantime, governments, businesses and haulage firms must plan for the worst and hold their breath for a resolution soon.
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