WA businesses are nearing a tipping point on fuel costs with more than three-quarters warning a sustained fuel price over $3 a litre would severely affect operations and cash flow.
A recent CCIWA survey found 76% of respondents would face significant financial pressure if fuel costs climbed beyond that level.
Let’s break it down:
|
Fuel price per litre |
Severe impact for % of businesses |
|
$2-2.40 |
22% |
|
$2.60 |
42% |
|
$2.80 |
17% |
|
$2.80-$3 |
16% |
Note: At the time of writing, the average diesel price in WA was $2.41 per litre, according to Fuel Watch.
Businesses nervous about further fuel price rises
CCIWA CEO Will Golsby said uncertainty around future fuel prices was becoming a growing concern for WA businesses.
“It’s alarming to see that we have already reached a point where many businesses in WA are having a severe impact from fuel prices on their operations and cash flow, with further increases expected in coming weeks and months,” he said.
The survey showed the point at which fuel prices have a severe impact varied between businesses.
“This impact varies across sector and business size, and we can see from the data that the impact has a similar effect between metropolitan Perth and regional areas,” Golsby said.
“But we know that prices in the regions tend to be higher due to additional transportation costs and less competition.”
Almost a quarter of businesses would be able to tolerate prices rising above $3 a litre, although that likely included those less directly exposed to fuel costs.
Calls to consider targeted business support
The Federal Government’s temporary fuel excise cut ended on August 3, which has increased the risk of further pressure at the bowser.
“We accept that the fuel excise cut needs to wind up for now because of the impact on the Budget,” Golsby says.
“However, consideration should be given to how best to support businesses through any spike in fuel prices.
“This is particularly important for businesses that are not able to reduce their fuel use, those locked into fixed-price contracts and businesses operating in the not-for-profit and care sectors.”
Fixed-price contracts can make businesses particularly exposed as they may be unable to pass higher operating costs on to customers. Not-for-profit organisations and care providers may face similar constraints while delivering essential services within fixed budgets or funding arrangements.
We’re here to help you
WA businesses needing support through the ongoing Middle East crisis can access information and resources through CCIWA’s dedicated Middle East Crisis hub.
