Rising fuel costs impacting more businesses

As the Government examines the pricing practices of New Zealand’s major fuel suppliers, an MYOB survey highlights the impact that rising fuel costs are already having. 
 
According to the latest MYOB Business Monitor Survey, 57 percent of small to medium sized enterprises expect fuel prices to put pressure on their operations over the next 12 months, with one-in-five business owners anticipating facing extreme pressure. 

“The Government’s fuel market study is extremely concerning, given the impact of high fuel costs have on business. We hope every effort will be made to ensure there is a workably competitive market for fuel,” says MYOB Head of Small Business Ingrid Cronin-Knight.
 
“Our Business Monitor data from 2015 to 2017 shows increasing numbers of businesses feeling the pinch of higher fuel costs. The number of businesses predicting significant pressure from this has grown progressively since 2015.”
 
Three years ago, only 12 percent of businesses reported feeling extreme pressure from fuel prices. This grew to 14 percent in 2016, and it has now increased to 19 percent. 
 
Cronin-Knight says reducing expenditure on fuel is not an option for many SMEs.
 
“High-priced petrol and diesel is an issue for the whole economy., especially small business operators who rely on fuel to run their operations every day. High fuel costs for them mean higher prices for everyone.
 
“Rising costs for small businesses have the potential to hurt the wider New Zealand economy, given SMEs are a key driver of growth and employment.”
 
She says the Government’s fuel market study confirms concerns in the business community about the market for fuel, and urges business operators to plan for plan for increasing costs. 
 
“Fuel is one of those living expenses we can’t avoid, and in the current economy, these expenses change regularly and often without warning.
 
“They should also be ready for this to affect their consumers. A combination of oscillating fuel prices and increases to other living costs can have a big impact on the amount of discretionary spending available for local households.
 
“SMEs need to take simple strategic measures to prepare for any changes. Some simple scenario planning that allows owners to look at how increasing costs can affect their operations, would be valuable. 
 
“Using online accounting tools can help with financial management, and your accountant can assist with benchmarking and strategic planning,” says Cronin-Knight.