Diesel prices climbing from £1.41 to £2 per litre since January are set to raise the annual fuel bill for UK infrastructure by nearly £590 million. The sharp increase places heavy fuel use under the spotlight for civils firms that rely on plant machinery.
Fuel costs add nearly £600m to infrastructure spending
Analysis published by Construction Enquirer highlights the scale of the impact. The infrastructure sector consumes more than one billion litres of diesel each year. The increased cost per litre pushes the fuel spend up by an estimated £590 million compared to early 2023.
This figure is a theoretical, annualised estimate rather than a sum of costs already incurred. However, the projection illustrates the growing cost pressure faced by contractors.
Plant fuel use drives cost exposure
Plant-heavy civils companies carry the heaviest burden. Diesel consumption can amount to around 15% of turnover for contractors focused on earthworks.
Fueling a typical 20-tonne excavator now costs between £880 and £1,000 each week, compared with £620 to £705 at the start of the year. These numbers underline the rising operating costs of plant on site.
Contractors warn of tighter margins
One civils contractor told Construction Enquirer the increase is arriving at a challenging moment, with already narrow margins being squeezed further.
Highways contractors face particular exposure. Diesel powers construction plant, generators, and transport for workers and materials. Site research from BAM found two-thirds of construction diesel is used by plant. The rest mostly fuels generators for power, lighting and heating.
Industry calls for fuel duty relief
Steve Mulholland, chief executive of the Construction Plant-Hire Association, has called for the 5p fuel duty cut to be extended. He also advocates targeted relief on commercial and off-road diesel to help ease rising costs.
Potential impact on UK road projects
The report does not identify specific schemes delayed or cancelled due to fuel prices. However, sustained diesel price rises add cost pressures for civils firms operating under tight budgets.
Whether contractors absorb these costs or pass them on depends on contract terms. The sector uses an estimated 25,000 to 30,000 diesel-powered machines over five tonnes, with excavators comprising over half the total.
Preparing for possible further rises
A supply-chain expert from the University of Salford warns businesses to be ready for diesel prices reaching £3 per litre. This remains a scenario, not a forecast.
As fuel costs rise, the economics of UK civils work come under closer scrutiny, with plant efficiency and contract negotiations becoming increasingly important.
