Fuel prices are causing massive headaches to road transport operators globally as prices rise to record highs.
Responding to the increasingly difficult situation, the International Road Transport Union (IRU) has launched a 17-point emergency plan for governments to tackle rising fuel prices and their impact on transport networks, energy security, and decarbonization plans.
Diesel prices are up by 63% globally since January 2021, spiking since the Ukraine war and with no end in sight to volatility.
And the IRU believes the issue is going to start sending some operators to the wall.
“The rising risk of small operators going bankrupt will further break down mobility and logistics networks and mean they are less able to invest in new vehicles to decarbonize.”
Radu Dinescu, IRU President, tells us road transport operators are facing a cash flow crunch, especially the 90% who are small and medium-sized firms.
“Volatility in diesel prices and inflexible commercial terms means they have little room for maneuver and bankruptcies are climbing.”
“This will damage road transport network capacity and efficiency, impacting supply chains, inflation, and the broader economy. We need to act now.”
Emergency measures
IRU’s emergency plan includes 17 government actions to support road transport operators, especially in alleviating fuel price volatility and realizing decarbonization roadmaps to the new realities of increasing energy insecurity.
Among the measures, IRU is calling for an adjustment mechanism on fuel excise for commercial transport operators, to provide short-term certainty and avoid the partial collapse of road transport networks and inflation.
The union also wants to see all modes of commercial transport pay the same fuel tax to keep decarbonization plans on course, as well as accelerate efficiency measures via collective road transport and eco-trucks.
“Amid greater energy insecurity and a growing imbalance between fuel supply and demand, all low and zero alternative and existing fuels also need to remain in operational use.”
Governments should review decarbonization policies carefully to plan a more gradual shift to renewable fuels, beyond battery electric vehicles, and scale back market distortions, such as road user charging and zero-emission zones that exclude already operational low carbon fuel options such as biodiesel and bio-LNG.
“IRU’s emergency plan steers government action in key areas to make sure that road transport continues to underpin economic growth and social health, avoid excess inflation, and keep our industry and transport in general on track to meet our decarbonization targets.” – Umberto de Pretto, IRU Secretary-General.
The emergency resolution was adopted by IRU members, with input from the commercial road transport sector in all global regions.
