Firms counting cost of rocky times in Middle East

Fuel prices have reached a new record as instability in the Middle East continues, Iran’s decision to stop sending oil to the UK is bad news for motorists already hit by high pump prices and North East businesses now fear the worst. STEPHEN CAPE reports.

THE record price of diesel and the high cost of unleaded fuel comes at a difficult time for North East business facing uncertain economic conditions.

The price of unleaded petrol is now at its the highest point since last May when concerns about the Arab spring sparked further concerns about supply and the cost to motorist will include a sizeable chunk of duty plus VAT at 20% which can add 60p or 70p to each litre.

The lifeblood of transport industry across the North East is fuel. With lorries achieving at best eight or nine miles to the gallon, the cost of running a fleet of trucks can run into millions of pounds each year.

And the rising cost of transport is loading more pressure on companies who are already struggling to compete in a challenging economic environment.

The prices are higher in this region than in more populous areas and companies have to travel further to reach markets further south. North East Chamber of Commerce research has shown that the region was shouldering at least an extra £85m fuel tax burden compared with London rates.

The prices clearly affect rural companies the hardest with petrol stations in scantly populated areas sometimes 10p a litre higher than in towns.

Fergusons Transport is a general haulage business in Cramlington and Washington. It runs a fleet of 120 heavy goods vehicles supplying a number of businesses such as Tesco, Nissan the car maker and the construction sector.