Just over three quarters (76%) of Western Australian businesses said their operations and cash flow would be severely impacted if fuel goes above $3 a litre.
A survey of more than 400 WA businesses, conducted in May, asked businesses to identify the fuel price point at which the impact on their “operations and liquidity would become severe”.
More than two in ten (22%) said the impact would hit once prices go between the $2 to $2.40 range, with four in ten (42%) impacted if prices hit $2.60 a litre. A further 17% said they would be in severe distress by the time fuel reaches $2.80, and 16% reported $2.80 to $3 a litre to be their limit.
CCIWA Chief Executive, Will Golsby, said businesses were nervous about where fuel prices will go in the coming months.
“Our survey shows us that businesses have different thresholds for when the price of fuel starts to have a severe impact on their operations,” he said.
“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.
“This impact varies across sector and business size, and we can see from the data that the impact has a similar impact between metropolitan Perth and regional areas. But we know that prices in the regions tend to be higher due to additional transportation costs and less competition.”
The survey found than 24% of businesses surveyed would be able to tolerate prices going up to $3, however this likely reflects businesses that are not directly impacted by the price of fuel.
Mr Golsby said the end of the Federal Government’s fuel excise cut, because of the impact on the budget, will likely mean higher prices and the situation should be closely monitored.
“We accept that the fuel excise cut needs to wind up for now because of the impact on the budget,” he said.
“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.”
Businesses in WA who need support through the ongoing Middle East Crisis can find more information on CCIWA’s dedicated Middle East Crisis hub.
