Business Begins To See The Effect Of Rising Oil Prices
Rising oil prices are not just affecting motorists travelling to and from work but businesses are now beginning to feel the effects of record fuel prices.
Businesses such as those involved in manufacturing or the haulage business are having to change the way they work in order to cope with the increasing oil prices.
A brick manufacturer in Buckinghamshire told The Daily Telegraph that it had gone back to using wood to fire its kilns – something the firm hasn’t done since 1926. Fortunately the company, HG Matthews, owns 90 acres of woodland close to its manufacturing base. It means that rather than pay the rising diesel prices the company can fire its new wood burning kiln practically for free.
The boss of the company, Jim Matthews, said “The price of diesel has really eaten into our profile margins”. He added, “If oil continues to climb, it will become prohibitively expensive to fire our kilns with diesel”.
According to Mr Matthews red diesel, which he uses to fire his kilns, was only 7p a litre ten years ago and has now increased to 70p a litre. It means that every time a kiln is fired up it costs £3,150 for the diesel alone.
After he’s in a wood processing plant he thinks the wood fired kiln will cut their business energy prices and prove to be cheaper than diesel fuelled kilns.
He said “I think there is a strong possibility of switching our entire production of 2.5 million bricks a year to wood. Oil is only going one way and we want to be ahead of the game”.
Meanwhile travel companies have warned that rising oil prices could reduce demand for overseas holidays and will therefore affect profits margins. While companies say that demand hasn’t been affected yet they warn that if oil prices continue to increase it could cause problems.
Oil affects most sectors of industry and therefore high oil prices could start to impact on the economy and stall the recovery.