Warning over fuel price impact
FUEL price rises have hit the profits of Suffolk businesses - and will force consumers to pay more for everyday goods, a Suffolk business leader said.Tim Ryan, the new chairman of the Suffolk branch of the Institute of Directors, said firms faced higher transport costs, but they might have to learn to live with this.
FUEL price rises have hit the profits of Suffolk businesses - and will force consumers to pay more for everyday goods, a Suffolk business leader said.
Tim Ryan, the new chairman of the Suffolk branch of the Institute of Directors, said firms faced higher transport costs, but they might have to learn to live with this.
Yesterday the Evening Star revealed that average petrol prices in Suffolk have broken the £1 barrier for the first time, well above the 80p a litre mark for unleaded which prompted nationwide protests in September 2000 and triggered one of Tony Blair's lowest points as Prime Minister.
Mr Ryan said recent rises in fuel prices had led to increased costs and reduced profits in the short term, because most businesses have a certain dependence on fuel.
And these increases are viewed as a further tax on private sector income - even though the government has no control over the basic cost of oil - because the largest proportion of the cost of fuel is tax, he said.
After checking the prices of 15 petrol stations around the county the Star found that the average price is around £1.02 for a litre of unleaded.
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Meanwhile diesel rings up on the average till at £1.06 per litre.
“It also increases the cost of transport and therefore has an effect on profitability. Ultimately these increases will have to be borne by the consumer.”
Mr Ryan said increased overseas competition would prompt businesses to think how to compete - or face losing market share to overseas suppliers, particularly those with much lower staff costs.
“Businesses may now need to consider alternative fuels and transport methods to regain a competitive advantage.”
Mr Ryan also suggested that fuel price rises would help government reduce the number of vehicles on the road and try to meet carbon emission targets.
“Increasing the cost of fuel therefore has a direct impact on environmental targets. This could be construed by some as a benefit of increases in fuel prices.”
Now some businesses had turned to rail, air freight and shipping, he said, amid the drive for innovative ways of reducing costs.
Mr Ryan said the institute wanted to see fuel prices fall but with the demand for oil so high worldwide, partly driven by the demands from developing countries like India and China, a reduction seems unlikely.
“We may need to learn to live with exceptionally high fuel prices.”