‘We expect a huge hit’: UK companies struggle as fuel costs soar
UK businesses reliant on fuel are braced for plummeting profits, as prices at the pump hit yet another record this week, with the cost of petrol topping £1.60 a litre for the first time.
Unleaded petrol hit £1.61 a litre on Thursday, having risen by 8p in a week, while diesel reached £1.70 a litre, as wholesale prices for oil remained close to all-time highs after western countries announced bans on Russian energy exports.
The RAC has urged the chancellor, Rishi Sunak, to cut VAT on fuel, as its figures show the cost of filling an average tank of petrol is at almost £88 while diesel has gone over £92. Meanwhile, companies are struggling with how to remain profitable as one of their biggest expenses grows ever larger.
Jonny Pattenden, the managing director of York-based courier JP Transport, says he is struggling to pay his staff as fuel prices surge. Since 2019, Pattenden’s fleet of nine vans moves everything from car parts to commercial waste, and runs an express courier service.
“In less than a year, fuel prices have jumped from £1.16 to £1.61. Because I cannot pass these costs on to our customers, I am having to swallow about 37% of my profit margin. It’s becoming really hard to keep my drivers on,” he says.
On top of high vehicle maintenance costs, the price of keeping the engines running may be enough to put him out of business. “The cost of living has gone through the roof. We are also being squeezed more on clean air zones in major northern cities – this is adding £40 to the average cost of a typical delivery journey.
“The government have the chance to release the stress on us, by cutting VAT and fuel duty by 40% for two years,” says Pattenden, who has started a petition for the cause that has amassed 50,000 signatures.
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