Fuel costs spark fears of ‘1970s-calibre disaster’

A Surrey business has warned the economy could be heading for a “1970s-caliber disaster” characterized by high inflation, unemployment and stagnant growth.

Kate Lester, owner of courier company Diamond Logistics, said her fuel costs had increased by more than 25% since the outbreak of war in the Middle East.

She told BBC Radio Surrey that logistics operated on “incredibly tight margins”, meaning costs would be passed on to consumers.

The Department of Energy Security and Net Zero said it was in contact with regulators over fuel prices.

“I’m a very optimistic entrepreneur,” Lester said.

“But we are certainly considering worst-case scenarios for the impact of these fuel price increases on our business.”

Oil and gas prices have soared since the first attack on Iran by the United States and Israel on February 28.

The RAC said on Monday the average price of diesel had risen by 29p to just over 171p a liter since the fighting began.

The average price of petrol has risen by more than 14p a liter over the same period, it adds.

Lester said small and medium-sized businesses had already been through a “very difficult time”, particularly as National Insurance and minimum wage increases drove up costs.

She added that her rent has also increased by 30%.

“Business is supposed to provide the growth that will get this country moving again,” Lester said.

“Yet we haven’t even had a triple whammy. It’s multiple whammy.”

“This will result in additional reinforcement of the hatches,” she continued.

Lester, who has been in business for 34 years, said the period following the Covid pandemic has been the most difficult she has ever experienced.

A spokesperson for the Road Haulage Association said soaring fuel prices pose a “significant threat to the viability” of transport companies.

“Our industry is an economic engine, with 80% of all goods and materials transported on the back of a truck,” they said.

The spokesperson called on the government to take “immediate action”, such as scrapping the planned increase in fuel taxes.

A government spokesperson said: “We know this is a difficult time for businesses, which are struggling with rising fossil fuel prices.

“The Energy Secretary has been in constant and close contact with the Competition and Markets Authority on road fuel prices, and we will not hesitate to act to protect consumers against any unfair practices.”

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