Record-high fuel prices squeezing firm's margins 'to nothing', bosses warn
- Credit: PA
Many smaller businesses in Suffolk are seeing their margins "squeezed to nothing" as a result of soaring fuel prices, it has been warned.
Suffolk Chamber of Commerce said businesses in the county were "especially vulnerable" to record fuel costs due to the high dependence on vehicle-reliant sectors, such as haulage and logistics.
The independent organisation, which represents and supports firms in the county, said the rising fuel prices were also "slowing down" plans of some companies to get employees back into the office.
The warning comes after figures from data firm Experian Catalist showed the average price of a litre of petrol at UK forecourts reached a record 182.3p on Wednesday, with diesel at an average of 188.1p.
That was an increase of 1.6p compared with Tuesday, taking the average cost of filling a 55-litre family car to £100.27.
Some forecourts in the UK are already selling petrol and diesel above £2 per litre.
Paul Simon, head of public affairs and strategic communications at Suffolk Chamber of Commerce, said: “As a rural county with a higher-than-average dependence in vehicle-dependent sectors such as haulage and logistics, Suffolk’s businesses are especially vulnerable to the current sky-high fuel costs.
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"While larger firms seem to have hedged their exposure to increases in spot prices and so put off some of the full pain for a while, this is an option unavailable to the many thousands of smaller firms which are the backbone of our economy. Many are seeing their margins and cash flow squeezed to nothing as a result of these additional burdens.
“Suffolk Chamber is also hearing from some members that record fuel costs are slowing down their plans to get more staff back into their offices, even on a part-time basis.
"Others are suggesting that some staff are looking to cutback on their hours in order to reduce their own cost of living. At a time when businesses are struggling to recruit and retain talent, these short-term trends are less than helpful.
“Suffolk Chamber expects the government to support businesses and their staff through further temporary cuts in fuel duty and VAT on fuel in addition to the very modest reduction announced recently.”
Patrick Crew, managing director of Sudbury Cars, said his firm has had to raise taxi fares but added the company would absorb more of the fuel price hike than the customer.
He said: "We live in exceptional times, not just in terms of the price increase with fuel but the cost of living as a whole, whether it's food, energy, you name it. Everything's been hit.
"But obviously our biggest outlay is the amount of fuel we go through to get from A to B.
"We will put up our airport prices up by the end of this week and then put the local jobs under review in the next week or so to see where we're at.
"I'd also say that if fuel prices do drop, which I hope they do eventually although that remains to be seen, then we'll drop prices accordingly, especially for the airports back to where we would have had them previously."