Businesses worried as fuel prices rise

Haulage firms and farmers say they are starting to "feel the pinch" after an increase in fuel prices amidst the US-Israel war with Iran.

Wholesale oil and gas prices have surged since the conflict began on 28 February, with the production and transportation of energy across the Middle East slowing or stopping entirely due to missile strikes and drone attacks.

One Somerset business which delivers across the South West of England said the rise was already costing it about £600 extra a week.

Its director Tristan Hann said: "It's demoralising and hard for the business and it's starting to affect us. We've said to our drivers, if you see cheaper fuel at the pumps, then fill up."

Hann - director of Cheddar-based company JTS Snacks - continued: "I'm sure we will be OK in the end as it's not at the levels of 2022 fuel prices.

"But prices are starting to inflate across the food chain which is tricky to navigate."

Movements in oil markets take about a fortnight to impact fuel prices.

The latest data from motoring organisation the RAC showed average petrol prices had risen by 9.5p to 144.29p a litre and diesel had increased by 19.7p since the war began.

Agriculture is being affected by the price of red diesel, which is subject to a much lower fuel duty rate than normal diesel but can only be used by specific industries.

Jeremy Padfield, a beef and arable farmer based in Stratton-on-the-Fosse, said the price of red diesel had almost doubled.

He told BBC Radio Somerset: "We bought some at 66.5p before the conflict started and we were priced at 115p this week for red diesel.

"The initial fear was the availability, sharply rising cost and a volatile market but it is fluctuating," he said.

"It's going to put a lot of pressure on farmers and food prices, food inflation will have to go up to make it sustainable.

"If the conflict is over quickly then it will be fine. But if this is longer-term, as it's been such a wet winter, we need to look ahead as this will affect us," he added.

Last week there were accusations of price gouging in the fuel supply sector, with Energy Secretary Ed Miliband saying on Friday the government would "not tolerate" profiteering from the conflict.

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