Fuel costs squeezing margins for some businesses

Some businesses in Jersey have expressed concern about the impact of rising global fuel prices.

Locally, and in the UK, diesel prices recently topped £2 a litre, and global leaders have since made efforts to ease the strain on supply.

The Government of Jersey has proposed to freeze fuel duty in 2027 in a bid to "help ease cost-of-living pressures".

A&A Scaffolding Solutions said it welcomed that move, but said it would provide "limited relief if global prices continue to rise".

Fuel duty was frozen in Jersey from 2023-2025, before rising in line with inflation in 2026.

In the proposed budget for 2027, external, the government has suggested freezing it once again.

It said "maintaining fuel duty at its current rate will help avoid additional costs for households and businesses that rely on transport, providing continued support at a time when many islanders remain under financial pressure".

However, some businesses on the island worry that it will not be enough to offset global prices.

Kelly Keating, from A&A Scaffolding Solutions, said "rising diesel prices are a real concern for us, particularly when they come on top of so many other costs that seem to be increasing across Jersey".

"Construction is taking a hard hit. We rely on diesel for machinery, vehicles and deliveries, so increases put direct pressure on the cost of carrying out work.

"Alongside rising material, freight and operating costs, this is squeezing margins and making it harder to price projects with confidence".

"A freeze in fuel duty would be welcome, but our concern is that it would offer limited relief if global fuel prices continue to rise.

"The wider issue is the cumulative impact. Businesses can only absorb so many increases before they affect investment, project viability and ultimately the prices customers pay".

Fuel costs are also having a "noticeable impact" for tree surgeons, Jonathan Le Maistre Ltd.

Darren Hopkins, from the firm, said "we depend on our vans, trucks, chippers, stump grinders, and other machinery that consume significant amounts of fuel".

"Increased diesel prices will raise our operating costs, reducing margins on jobs and making it more difficult to absorb costs without passing some of them on to our customers".

Hopkins said continued increases would be a "concern for their business, and the wider industry".

However, some businesses are managing through the disruption.

Jeremy Phillips, from Barette Plant Hire, said it "hasn't been too much of an issue so far, but that fuel surcharges are being added to hourly rates".

However, he said that "if the prices keep going up, customers aren't going to be carrying on with their projects".

In the run-up to the unveiling of the 2027 budget, Deputy Lucy Stephenson called for a reduction in fuel duty, but those plans were withdrawn following assurances from ministers that support was coming.

Speaking at the time, Treasury Minister Alan Maclean said the government "didn't like the idea of reducing fuel duty because it wasn't targeted".

Instead, ministers opted for a freeze on duty for 2027, prioritising targeted support for families and those "struggling the most".

Responding to the fresh concerns from businesses, Maclean said: "Rather than expecting businesses to absorb increased costs such as higher fuel prices, the budget provides support directly to consumers to help them manage those pressures and spend in the local economy".

"Fuel prices are largely driven by global markets and geopolitical events outside Jersey's control.

"What the government can do is avoid adding further pressure where it can.

"The proposed freeze in fuel duty will help mitigate the impact of prices rises by reducing the level of duty in real terms".

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