Industry body says the UK will be impacted by trade disruption and rising fuel prices
Business group Logistics UK has urged Chancellor Rachel Reeves to review her decision to begin increasing fuel duty this year, in the wake of the conflict in the Middle East.
The group says Reeves should use her Spring Forecast to bolster business confidence and supply chain resilience in the wake of the evolving situation in Iran and its neighbouring countries.
Logistics UK CEO Ben Fletcher noted that the conflict has already begun impacting supply chains through the closure of the Strait of Hormuz and the cancellation of flights, which he said will increase prices as a result of disruption, rerouting and higher insurance premiums. The Strait of Hormuz is a critical point for global shipping, and the movement of crude oil in particular.
“Approximately one fifth of the world’s oil supplies move through the Strait of Hormuz every single day and with this shipping corridor disrupted, the global price of oil is already climbing: this increased cost will soon be seen at the UK’s pumps,” Fletcher said.
”Our sector, which delivers all the goods that the UK relies upon every day, already operates on incredibly narrow margins and any significant fuel price rises would have to be passed on to the customer. We are therefore urging the Chancellor to focus on bolstering business confidence and supply chain resilience, including by reviewing her decision to begin increasing fuel duty this year (as announced in the 2025 Autumn Budget), to prevent further inflationary pressure at a time when the global economy is so disrupted.
“The escalating military situation in the Middle East risks seriously impacting international trade. As a sector, logistics is flexible and is already seeking alternative routes but there will be an impact on the UK’s supply chain across the summer on those goods which arrive in the UK by sea.
”We are maintaining close contact with government to monitor developments and help mitigate the impact of these disruptions on UK businesses and consumers, and the risks to logistics personnel operating across the Middle East.”
