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Small businesses are hiking their prices to cope with the rising cost of fuel.

Just over half of businesses (52 per cent) are passing on their increased costs to customers, according to research by Bibby Financial Services.

Of the businesses surveyed, 79 per cent of owners / managers said they were feeling the effect of rising fuel costs on their business, with just over a third (35 per cent) looking for ways to diversify and grow their business in order to cope with higher prices.

While a quarter (26 per cent) are already trying to reduce costs by cutting how much time they spend on the road, one in five is under pressure from employees to increase fuel allowances (19 per cent).

A north / south divide is also evident, with 83 per cent of owners/managers in the north of England citing the rising fuel costs as the key transport issue affecting their business, ten per cent more than those in the South.

Region by region, it is those businesses in the more rural area of East Anglia that are feeling the greatest effect of the fuel crisis (96 per cent), along with industrial areas such as the East Midlands (90 per cent) and the North West (89 per cent).

Around a third of businesses in the Midlands and the South (27 per cent) are already responding to the fuel crisis by reviewing their company vehicles and making plans to introduce more efficient models – nine per cent more than in the North (18 per cent).

David Robertson, chief executive of Bibby Financial Services, said the majority of businesses are yet to take action: ‘Owners and managers must take steps now to fortify their cash flow and reduce the risk of the fuel crisis on their business from being any greater than it already is.’

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