Businesses in Yorkshire are being advised to consider setting their fuel costs now as a strategy to minimise the possible impact of the proposed fuel duty increase in August.
Treasury experts at Yorkshire Bank say it is important for businesses of all sizes to stabilise their future fuel prices.
Although the Government recently postponed the proposed fuel duty increase of 3p per litre until August 2012, fuel prices continue to fluctuate and remain within touching distance of the all-time UK record high of 136.9p per litre set in May 2011.
Data issued by the AA in December last year revealed the average price for a litre of unleaded fuel in Yorkshire and Humber is now 131.3p with diesel users facing an average price of 140.4p per litre. Businesses can prepare for any fuel duty increase and fluctuating fuel prices by exercising a fuel hedging contract, said experts at Yorkshire Bank. Fuel hedging allows prices to be fixed for a set period.
David McGill, head of treasury solutions, said: “Even Yorkshire and Humber businesses using just 50,000 litres of fuel a month should be looking at the security provided by hedging, particularly during times like these when speculation about fuel prices is intense.
“Should the proposed duty increase go ahead in August, a business with this level of fuel consumption would be facing additional costs of £1,500 per month.
“The obvious advantages of fuel hedging are the benefits of removing guess work from budgeting and relieving worries about possible sharp increases in fuel prices affecting cash flow.”