£2 diesel threatens £600m construction fuel shock
The UK construction industry is facing a significant financial strain due to a 42% surge in diesel prices since the start of the year. Industry leaders warn that these rising costs are threatening the viability of many firms and are calling for government intervention through fuel duty cuts.
Why it matters
Rising fuel costs in the construction sector can lead to project delays, increased infrastructure costs, and potential business insolvencies, impacting the broader economy.
Construction has suffered a near £600m fuel price shock since the start of the year as diesel prices soared to a record £2 a litre yesterday.
The infrastructure sector burns more than 1bn litres of diesel a year, meaning the rise from around £1.41 a litre in January has inflated its theoretical annual fuel bill by around £590m.
The 42% surge is ripping into margins across plant-heavy civils businesses, with muckshifting contractors among the hardest hit.
Diesel can account for around 15% of turnover at these firms.
A typical 20-tonne excavator consuming around 440-500 litres a week now costs around £880-£1,000 to fuel, against roughly £620-£705 at the start of the year.
A civils contractor told the Enquirer : “This is hitting the industry at a very tough time with a squeeze already on margins. The fuel inflation is going to push a lot of firms to the brink.
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