Fuel crisis hurting Suffolk businesses as government urged to help


06:00 17 June 2022

As the cost of petrol and diesel continue to rise – reaching £2 a liter in part of Suffolk – business leaders have called on the government to do more to help.

The Suffolk Chamber of Commerce says high fuel prices are having a ‘chilling impact’ on day-to-day economic activity.

The price of E5 unleaded petrol has risen to over £2 a liter at the Shell garage on Farnham Road, Saxmundham, which was confirmed by staff on Wednesday.

The price of unleaded averages just over 187p per liter and diesel averages 193.3p per liter nationwide, according to RAC data.

The general manager of taxi company Sudbury Cars, Patrick Crewe, said rising costs have led the company to raise prices on some routes.

He said: “Diesel prices have risen from an average of £1.37 in August 2021, after delivery shortages, to an average of £1.90 locally since last week, with almost daily increases, a 38%+ increase locally in just six months.

“Do we believe they will go over £2.00 locally? Unfortunately yes.

“As a business, we left our local prices unchanged after the April 2022 fuel shortages and absorbed the costs as a business, although we increased our airport prices, which we had to. again as these are our longest scheduled journeys, particularly to Heathrow and Gatwick.

“Although our price increase will always be well below the actual increases in fuel prices over the year, which means that we absorb some of the costs for our customers. If fuel prices go down, we will lower our prices .

“The price at the pump, even when the price of Brent and wholesale prices fell, for example last year, after August 2021, did not, in turn, fall and only continued to increase.”

Patrick also believes that the government should step in and help, adding: “The best idea that has been presented so far, via the AA, is that of a price leveler where the price remains constant with the value of the tax taken. rising and align with Brent Crude/wholesale prices.

“The fuel increases, with more to come, will be the catalyst for a deep recession in the UK, if things continue as they are without any tangible government intervention.”

Suffolk Chamber of Commerce representative Paul Simon said: “Regardless of whether diesel and petrol prices are rising, slowing or reaching the psychologically significant level of £2 per litre, the costs fuel for most Suffolk businesses and their workforces are already crippling in their impact on daily economic activity.

Paul Simon, of the Suffolk Chamber of Commerce.
– Credit: Nicky West

“They are also proven to have a negative impact on longer-term plans, which is not good in terms of future growth and job prospects.

“Corporate cash flows are under intense pressure. Orders that many of our members got a few months ago could end up costing them money to deliver due to labor and raw material inflation.

“Record fuel costs are slowing companies’ plans to bring more staff back into their offices, even on a part-time basis. Others suggest some employees are looking to cut their hours to reduce their own cost of living.

“At a time when companies are struggling to recruit and retain talent, these short-term trends are far from helpful.

“The government now has the fiscal tools to help alleviate these pressures. Almost half of the cost of fuel in the UK is due to customs duties and VAT.

‘There is no point in the Competition and Markets Authority investigating whether the old fuel tax of 5p has been faithfully passed on by retailers without the government also stepping in to reduce its own take.’

The Suffolk Chamber is stepping up its pressure on the government and has three demands:

  • An immediate and significant reduction in fuel taxes and VAT for the next 12 months.
  • A temporary increase in mileage allowance from 45p to 60p closer per mile, so that staff are not deterred from using their own vehicle for work purposes.
  • A strategic commitment to implement a business-friendly agenda for the remainder of this legislature to include a reduction in the corporate tax burden, new incentives for start-ups and scale-ups to accelerate delivery their growth plans and tax incentives to invest in capital and training.

Mr Simon added: ‘There is little that hardworking and enterprising business leaders in Suffolk can do at times like this. The government, using the fiscal tools at its disposal, must help with the rest.


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