THE Federation of Small Businesses is urging the Government to prevent a runaway rise in fuel prices.

The pleas come after the recent increase in VAT to 20% and a rise in fuel duty to a record high.

Before last year’s General Election, the Conservatives pledged in a manifesto to impose a fuel duty stabiliser – a mechanism to ensure an automatic freeze on fuel duty increases and a reduction in duty to match any increases in VAT revenues from higher pump prices.

The FSB has expressed disappointment at how the policy was not put into practice last week, and fears firms could be badly affected by the record high fuel prices.

Mike Learmond, North Wales and Chester regional organiser for the FSB, said: “The country’s small businesses are not just hard hit by the recent VAT rise, but also by record high fuel prices which has come at the most fragile of times.

“Small firms, such as the haulier and the taxi driver, will all be severely affected by this rise in fuel duty.

“Unlike big businesses, they will have to pass the cost on to customers at a time when they already have to deal with the VAT hike.

“This most recent increase will hit rural businesses in North Wales particularly hard. Transport costs are higher in rural areas and will increase pressure on businesses’ profitability.

“In addition, many employees will find it difficult to bear the extra cost of getting to work. For many, public transport is not an option and a car is essential for the daily commute.

“This may lead to increased wage demands at a time when struggling businesses can least afford it.”

Mr Learmond added: “In opposition, the Conservative Party promised to put a fuel duty stabiliser in place – something the FSB has been calling for. But they have failed to deliver.

“As such, they are placing strain on already hard-hit businesses’ cash-flow.

“It is imperative the Government acts now and introduces the stabiliser to avoid a relentless flow of fuel duty increases that simply put small firms on a knife-edge.”