This week has seen record pump prices across the region, with average prices for diesel reaching £1.76 a liter and petrol at £1.65.
Less than two years ago the cost of petrol fell to just over £1 a litre, due to reduced demand following the Covid lockdown.
The world price of crude oil was already on the rise and was aggravated by the conflict between Russia and Ukraine, which created massive instability in the industry, fears that Russia, the Union’s largest trading partner European Union, responds to sanctions by restricting its oil supply. pipeline supply from Europe, creating a reduction in supply and increasing demand.
The United States and Canada have banned the purchase of Russian oil, which means that the demand for oil from other producers has increased, also driving up prices.
Whatever the reason, local business owners whose profitability depends on petrol and diesel said the situation was “unsustainable” and that prolonged inflation would “make it difficult to survive”.
As global market forces and the conflict in Ukraine spiral out of government control, with a current fuel tax of 57.95 pence per liter on top of the standard 20% VAT, a significant part of the price paid to the pump is a tax.
It’s a situation that has led local taxi drivers, driving instructors and transporters to plead with the government to do more to help them survive, including a temporary reduction in fuel taxes and levies.
Here’s what they had to say.
Seaham Express Light Haulage owner John Adams, 64, has decided he cannot accept long-distance contracts until the price of diesel drops.
John, who delivers building materials, said: “The cost of fuel is absolutely crippling and just not sustainable. There is a real fear that some companies will go bankrupt and not survive.
“I have just returned from work in Devon and a trip that would normally cost me £150 in diesel is £280. I had already committed to this work but decided not to do any more long distance work as it is simply not profitable.
“I can survive for a few months, but the government needs to do more. Transport drives the country forward and I feel like the transport industry has been abandoned – they seem to have provided support everywhere else.”
Even if the cost of oil goes down, John worries that it won’t be passed on to the customer.
He added: “If people keep paying it – even if it eats away at their savings – then I don’t think the price will ever go back to where it was.”
John’s concerns are echoed by fellow haulier Graham Welsh, 60, whose family owns MGW Haulage Ltd in Sunderland.
Graham said: ‘The cost of filling our vehicles with diesel is normally around £4,500 a week and that figure has risen to £5,500 which is simply unsustainable. We have a loyal customer base, but I think the government should lower the level of taxation to help businesses.
“The government needs to listen to people’s concerns. French hauliers have been protesting and blocking roads because of the rising cost of fuel and that’s something I would be willing to join other truck drivers if we don’t feel that we are listened to.”
Graham also believes that soaring petrol and diesel prices have led to “a massive increase” in fuel theft – something his own business has suffered from.
Peter Phelan, owner of Phelan Haulage and Hiab Hire in Washington, also called for increased support.
He said: “My diesel costs have increased by around 20% in the last four weeks and I think many transport companies are going to run into big trouble.
“I think the government could do more to reduce fuel duty to help reduce costs.”
Taxi drivers in the area have also seen a big impact from rising petrol and diesel costs, leading John Kenny, owner of John’s Taxis in Houghton, to look to downsize his vehicle.
John, 62, said: ‘The cost to me of filling up my car has gone up by £40 in just six weeks – it’s terrible. I also own an eight seater minibus and have to consider downsizing to something smaller as I can’t afford to run it anymore.
“At the moment I have to absorb the costs, but I no longer make long distance journeys to places like Manchester Airport as it’s not profitable. The government needs to do more to help small businesses.”
Vikki Holt, owner of the Top Gun driving school, had ‘no choice’ but to pass on the extra fuel costs to the customer.
She said: “Every time I fill up my tank it costs me an extra £15 which works out to around £180 a month. I normally charge £27 for a lesson, but from April 1 it goes up to £30. I hesitate to raise my prices but it is an unavoidable situation.
“It will be difficult for some driving schools to survive if we don’t get support from the government. I read last week that there has been a reduction in the price of oil, but there is no indication that this will happen. passes on to the customer.”
In response, a spokesman for the UK Treasury said: ‘To cut costs, fuel taxes have been frozen for the twelfth consecutive year, which will save drivers around £15 each time they are filling their reservoir compared to pre-2010 plans.
“We’re providing around £21billion this financial year and next to help families, which includes cutting the Universal Credit Tapering Rate, freezing alcohol duty and helping households with their utility bills. energy through our £9.1 billion rebate.”