FARM LEADERS have urged the government not to increase duty on gas oil on the back of recent fuel price hikes.

The cost of red diesel is due to rise by 2.42 pence per litre this September as one of the measures announced in the 2004 budget.

But the duty hike is set to hit agricultural and horticultural industries hard after crude oil prices rose to unprecedented levels, warned the National Farmers Union.

The impact will be particularly strongly felt in late summer and early autumn as farmers enter the period of heaviest fuel use for harvesting and drying crops.

“The intended increase in duty we estimate will add well in excess of £15 million to the industry‘s annual fuel bill,” said NFU president Tim Bennett.

“It is well within the government‘s power to mitigate fuel price rises by delaying the planned duty increase.”

Any loss to Treasury coffers will be readily offset by the increased VAT revenue on pump sales received from the increased crude oil price, he added.

Although the duty increase was justified on environmental grounds, The Treasury was less willing to add to its green credentials with an alternative duty rate for biofuel, noted the Union.

  • More on oil prices and their impact on farm can be found in the Business section of Friday‘s (May 21) issue of FARMERS WEEKLY.