Member Article

Tax rise fuels petrol price fears

Petrol prices could surge to near record highs following a 2p rise in fuel duty this week. That increase could push up the average price of unleaded to about 98p, while diesel could exceed £1 if the cost is passed on to motorists. As well as motoring and consumer groups, business organizations have expressed their concerns over the increase.

Colin Stratton, North East Regional Chairman for the Federation of Small Businesses said: “The 2p rise in fuel duty will hit many small businesses hard. Prices are already high at the pump and this will make it worse. Many firms cannot take their produce or tools on public transport. In rural areas this is even more difficult and customers need their car to get to the point of sale too. With other pressures, such as an increase in red tape coming in at the same time along with access to finance getting more difficult because of the credit crunch at the banks, this rise in duty is not at all helpful to small employers.”

North East FSB member, Treena Fenwick, who is owner of DTF Courier Services which is based in Byker, Newcastle, fears it could lead to her losing business. DTF, which specialises in next-day delivery of small parcels, has seven Transits in its fleet. But Mrs Fenwick is concerned that the fuel duty rise – which will be followed by another 2p increase in 18 months’ time – will see customers forced to move to larger firms.

She said: “Fuel prices are a big factor in our operating costs. Some customers will move to bigger delivery companies because they can bulk buy fuel. They also have larger vehicles so can take more parcels and keep costs lower. “For us and all small businesses where fuel is a big factor in costs, these rises will be a massive impact. The larger operators will take the work and, eventually, competition from small businesses will be lost.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .