Growth warning over soaring fuel costs

20 June 2008

Organisations and consumers are feeling the squeeze of rising oil prices and high fuel costs could stifle UK economic growth and employment, a report warns.

According to the Federation of Small Businesses (FSB), record oil prices are increasing costs for small businessowners and firms using heating oil are advised to check prices carefully to secure the best possible deal.

More than 80 per cent of small businesses surveyed by the FSB stated that fuel costs are likely to make it more difficult for them to expand their operations or appoint more staff over the next 12 months.

The poll of over 9,000 small businessowners also found that nearly 40 per cent expect to reduce staff numbers within the next 12 months because of higher fuel costs.

John Wright, FSB national chairman, commented: "Small businesses are reaching breaking point and if something is not done about rising fuel prices very quickly then we will have a major economic crisis on our hands."

The FSB wants ministers to reduce fuel duty as revenues from North Sea oil continue to climb, which would help to ease the pressure on businesses and consumers.

Oil prices dipped in Wednesday trading this week following a decision by the world's largest oil producer Saudi Arabia to increase production by 300,000 barrels a day and China's pledge to raise domestic fuel prices.

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