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OTTAWA - Transport truck drivers in the region need relief from rising diesel costs, says the executive director of the Atlantic Provinces Trucking Association.

Peter Nelson said his group is asking the provincial government to trim tax on diesel by at least a dime a litre.

"It has to be cut at least 10 cents to make sure it works because if it's cut only a penny or two, the retailers will simply fill it back in," he said.

Nelson said the rising cost of fuel has become the industry's top worry, trumping last year's concern about a shortage of long-haul truckers.

Fuel prices have climbed steadily in recent months, with the price of a litre of diesel in New Brunswick hovering above the $1.40 mark Friday, while oil prices closed at $116.43 a barrel.

Nelson said global demand for diesel, particularly in growing economies such as India and China, is spurring fuel prices to record highs.

He said refineries are also producing cleaner diesel, which is also contributing to a spike in prices.

A spokesperson with the Department of Finance said a review of fuel taxes, among other consumption taxes, will be part of a green paper on tax reform in the province.

The review will begin during the summer and continue into the fall.

Following the review, a legislative committee will be tasked with making recommendations to the government about tax policy.

There is no timeline on a decision.

Nelson said a credit squeeze is also crippling access to cash flow and rendering businesses less competitive.

"The trucking industry is almost at the point where they have to deal in cash," said Nelson. "The minute the van or the refrigerated unit pulls up to the store, there has to be someone ready to pay them. That's just not happening because Wal-Mart isn't going to cut you a cheque the moment you arrive."

Nelson said some trucking companies have had their terms of repayment cut to seven days.

"It's getting really ugly out there," he said.

Nelson said he hopes to meet with industry groups soon to address the problem.