Livestock transporter Gerard Johnson pays $15,000 a week for diesel and is worried prices are going to increase even further.
- The price of diesel is at a 10-month high this week at 212.6 cents a litre
- Regional businesses say they’re struggling to absorb the rising costs
- A livestock transporter says diesel prices had risen 30 cents in six weeks
Australian Institute of Petroleum’s most recent weekly report shows the national average price for diesel is at an eight-month high of 212.6 cents a litre, an increase of 5.7 from the previous week.
Mr Johnson said he couldn’t avoid passing on the increasing costs.
“In my business it might be $15,000 a week on average that we’re paying for fuel,” Mr Johnson said.
At the beginning of last year it was close to $11,000 a week, so it’s been a considerable jump, probably the best part of 50 per cent.”
He said prices had risen by 30 cents in the past six weeks.
“We can’t absorb that kind of hit,” he said.
He said there would be a flow-on effect across the supply chain.
“So at the end of the day people can expect to pay more at the supermarket for everything,” he said.
Prices passed on
The rapid price jumps are putting increased pressure on businesses such as Rose Leggett’s, that rely solely on the transportation of goods via road.
Ms Leggett, who runs a small supermarket in Longreach with her husband Lloyd, said freight costs had doubled for her business since the beginning of 2019.
“Right across the board it affects everything you do,” Ms Leggett said.
“For small family businesses, you’re trying to cater to everyone, you’ve got a lot of staff that really depend on you week to week.
“There’s a lot of facets to it. It’s not just what you sell out the front door.”
Ms Leggett also said passing some of the prices onto customers was unavoidable.
She said people were changing their shopping habits as cost of living rises forced families to tighten their purse strings.
“The majority of people are really looking for specials now,” she said.
“So we’ve really increased our special offers, which affects us straight in the hip pocket.
“But you’ve got to try and balance that so you’re taking care of the people in your community because without them you don’t have a business.”
‘Everything is really tight’
Ms Leggett’s daughter, Rhiannon Matthews, runs a florist shop in town.
She expanded from selling bunches in the supermarket to having her own storefront.
“We’re in a position where we can’t just go to the local markets and pick a bunch of flowers,” Ms Matthews said.
“Everything else is really tight too, so it not only affects my business but everyone else’s pockets have only got so much in them.”
She said rental prices, electricity and the cost of the flowers were also impacting her business.
She said the cost of imported carnations went from $5 to $9 per stem in a week.
“Everything is so tight now and people are being so careful, which we have to do,” she said.
“One surcharge in one area affects so much more because it’s not just our flowers, it’s our clothing, it’s our food.”
She said her flowers travelled at least 1,200 kilometres by road.
“So we might have to pay three lots of freight charges before we can pass it on,” she said.
Extracted in full from: Rising diesel costs affect transport supply chain for regional businesses – ABC News