4 July 2017
Rising fuel costs impacting more businesses
Fuel prices seen as greatest pressure on small business operators
Fifty-seven per cent expect fuel costs to put pressure on their operation over the next 12 months, with one-in-five
citing “extreme” pressure
As the Government examines the pricing practices of New Zealand’s major fuel suppliers, leading accounting software
provider MYOB is highlighting the impact that rising fuel costs are having on the wider economy.
According to the latest MYOB Business Monitor Survey, 57 per cent 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 per cent of businesses reported feeling extreme pressure from fuel prices. This grew to 14 per
cent in 2016, and it has now increased to 19 per cent.
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Number of businesses feeling “extreme” pressure from rising costs
Ms 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 Ms Cronin-Knight.
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