Conflict causing fuel chaos
Fuel prices continue to cause chaos.
By Rachel Williams
Ramifications from the ongoing war in the Middle East are having huge consequences with business owners across the North East preparing for the worst.
The timber industry, transport operators, farmers and the Dorset Council are feeling the pinch as fuel prices soar with diesel up to $3.25/l in some locations this week.
Multiple sources have told The Advertiser that one large trucking company has warned employees of possible shutdowns and job losses because they can’t afford to keep operating.
AKS Forest Solutions director Tony Stonjek said haulage contractors were in a world of pain with fuel accounting for 30 per cent of overall costs.
Mr Stonjek said Federal Government intervention with a halving of the fuel tax, and a scrapping of the Heavy Vehicle Road User charge would help a little bit, but there had already been a visible slow down that would be hard to negate.
“When the world’s going normally you can forecast costs with minor adjustments and you just absorb it, but you can’t absorb what we have had in last three weeks,” Mr Stonjek said.
“One contractor I know has a normal fuel bill of $1 million a month which he has accounted for and allowed for, but his last bill was $1.5 million. He said he’ll do it once but won’t do it twice.
“One company, Midway, which is a major exporter of woodchips, has just recently stopped all operations out of Bell Bay completely,” Mr Stonjek said.
“Other big companies are still going but they will be limited to what shipping they can access as ships slow down because of the cost of their diesel. If they stop coming then obviously the whole thing grinds to a standstill.”
Mr Stonjek said on a scale of 1-10, business fears were at an eight.
“We don’t know where it will end and the unknown is the worst.
“If you are dealing with private landowners directly, you set a price for their timber and a royalty they will receive. Then fuel prices go up which affects the cost of harvest and haulage. If you go to the landowner to reduce their royalty – they will say ‘sorry, if that’s the case leave the timber where it is and come back when it is stabilised’.
“So that immediately affects employment. Sawmills will stop receiving timber which impacts the building industry.
“We have a saying that one tweet from the twit can affect the whole world’s economy.”
One farm contactor said it took 330 litres on average to take a load of spuds to Smithton for processing at McCains and then return to Scottsdale, which equates to $1050 per load for fuel currently. At the end of February it was just $580.
Dorset Council is keeping a watch on the operational impacts its seeing with increased fuel costs for Council fleet, plant and contractor services, a potential escalation in construction and maintenance costs, supply chain delays or cost increases for materials linked to petroleum products.
General Manager John Marik said it would put upward pressure on operating budgets and capital works programs with the potential need for budget adjustments or reprioritisation.
Bass MHR Jess Teesdale said she understood the real sense of uncertainty across the community. “I’m hearing it from families, from small business owners, and especially from farmers across North East Tasmania,” she said.
“The rising cost and availability of fuel is weighing heavily, and for many, it’s not just an inconvenience, it’s a genuine concern about how to continue day to day.
“We are releasing fuel from reserves, adjusting rules to ensure more fuel stays in Australia, and working closely with states and territories to get supply to where it’s needed most. We have also passed new laws to crack down on petrol price gouging, with significant penalties for those who do the wrong thing.
“Work is continuing to strengthen our long-term resilience. That includes building stronger international partnerships, opening new markets for our producers, and looking at how we can increase sovereign capability, including in areas like fertiliser production.”