Fuel costs force tough choices for South East firms

Businesses in the south east of England have expressed fears that soaring fuel costs are threatening the long-term viability of their operations.

As conflict in the Middle East continues, diesel prices have reached a record 199.33p a litre on Monday, according to the RAC, with petrol prices at 174.23p.

David Zaccheo, general manager of Alcaline UK Limited in Hythe, Kent, told the BBC soaring diesel prices had been "detrimental" to his haulage company.

A spokesperson for HM Treasury said since the war in Iran, the government had continued to protect British people and businesses.

They added: "This means drivers benefit from the extension of the 5p fuel duty cut, with diesel 11p per litre cheaper until the end of the year than it would have been compared to plans inherited from the previous government."

Zaccheo said between March and the end of August, his company had spent an additional £650,000 in fuel costs compared to the same period last year.

Fuel, he said, accounted for about 30% of its overall costs.

"You could absorb those costs for a few weeks, but eventually they have to be passed on to customers.

"We simply can't continue operating like this indefinitely."

Zaccheo said the company has lost about 20% of its client base and had to park up some vehicles.

"Some customers had reduced their orders while others had chosen to go elsewhere," he added.

Until conditions improved, there would be fewer vehicles available across Europe, he said.

Alan Clifton-Holt, a farmer from AA Clifton in Romney Marsh, Kent, said his farm used about 100,000 litres of red diesel a year.

"The prices would normally be about 70p a litre, but this week they're about £1.15," he said.

"For the first time in my career, I questioned whether we should be farming at all."

Clifton-Holt said the rising fuel costs had changed the way they cropped.

"We're planting more rapeseed because it offers a higher return and has benefited from increased oil prices," he explained.

"However, we've dropped other crops that don't provide the same margin."

In East Sussex, Guy Cordery, a partner at Cordery Coaches, said since February it had cost them an extra £300 to fill up a coach.

"We do our best to cushion the impact for passengers, but with increases of this scale, we have little choice but to raise prices," he said, adding that the biggest concern was that people might stop booking.

He said many of the firm's customers were retired and living on fixed incomes, so were particularly affected by rising costs.

However, he added: "We are fortunate to have a loyal customer base, and the future of the company is as secure as it can be under the circumstances."

Duncan Saunders, who runs BR Saunders, based in Walton-on-Thames in Surrey, said the company has had to spend an extra £170 a day to fill up its vehicles.

"We've been absorbing the extra costs for months, but it will eventually need to be passed on to customers," he added.

Saunders said the business's operational plans had also been affected.

"Because there's so much uncertainty, we've paused investment into our fleet," he said.

"These are worrying times, soaring petrol prices don't just affect businesses, it also impacts the economy and livelihoods."

The soaring diesel prices have not just affected businesses, but those who rely on it regularly.

Rocky Alan, a biker from Hastings in East Sussex, said: "Life is getting harder for everyone and people are looking for ways to save money."

Alan said she had been riding her 125cc bike more regularly as it was more economical, costing £6 to fill up.

When asked whether rising fuel prices would make her give up biking, she replied: "Bikers would always find a way to keep doing it, even if that meant making a few adjustments."

Gordon Balmer, executive director of Petrol Retailers' Association, said: "Record diesel prices are hitting motorists, businesses and retailers alike.

"Drivers are cutting back on fuel purchases, businesses are facing higher costs, and retailers have reduced diesel margins by 21% since July to help soften the impact."

It said it was urging the government to abandon plans to raise fuel duty next year.

A spokesperson for HM Treasury said: "As has always been the case, decisions on tax are a matter for the chancellor to set out at fiscal events, rather than routinely commenting on rumour, speculation or proposals.

"The government will not be increasing fuel duty this year, extending the temporary 5p fuel duty cut until 31 December."

Follow BBC Kent on Facebook, X, and on Instagram and listen to BBC Radio Kent on Sounds. Send your story ideas to southeasttoday@bbc.co.uk or WhatsApp us on 08081 002250.