Monday 23 May 2011

Businesses paying £250m extra fuel costs

Small businesses are paying a quarter of a billion pounds more on fuel today than they did last year, claims new research.

Bibby Financial Services found that 4.8 million small and medium-sized businesses (SMEs) are paying on average £260,000,000 more compared to 12 months ago.

The rising fuel cost could already be having an impact on consumer prices. The financial advisors' survey suggests that some sectors have been hit harder than others with 76 per cent of firms in transport and 51 per cent in wholesale having to pass on the cost.

Edward Rimmer, Bibby Financial Services UK chief executive said: "Businesses have had some very tough decisions to make as on the one hand they may face losing customers by passing on the extra fuel costs and increasing their prices, but in some cases they will have no choice as the cost cannot be absorbed in any other way.

"It is one of many challenges facing SMEs and highlights how important it is to stay on top of cash flow management when faced with rising costs."

Businesses are being forced to think about becoming more efficient, as more than a quarter (27%) said they are reviewing company vehicles and planning to introduce more efficient models as a result of the increased cost.

Yorkshire firms were the most likely to try and cut time on the road (46%) in order to spend less, closely followed by Wales (46%) , both far outstripping London (16%) on lowering road time.