UK Retailer Warns of Price Hikes Amid Soaring Diesel Costs

One of the UK's largest online retailers has indicated that prices will need to rise if diesel costs persist in their upward trajectory after exceeding £2 per liter. Mike Tomkins, owner of M and M Direct, expressed that his company is finding it increasingly difficult to absorb shipping and freight expenses without passing them on to consumers.

Tomkins warned that if diesel prices do not decrease from their record high, his company, a significant online discount retailer in Europe, will inevitably pass on a portion of the escalating costs. "The situation is a lot more volatile than it has been, and what really worries me is the fuel shortages which will affect the whole economy and business – it's a very dangerous time," he told the BBC. He added that in his 45 years in business, this period feels like the most unstable.

These comments emerged as UK motorists face the highest-ever fuel prices, with the average cost of diesel now surpassing £2 per liter, according to the RAC. The cost of filling an average family car with diesel has surged by nearly a third, amounting to approximately £110, which is nearly £32 more than at the start of the US-Iran war, the motoring organization reported.

Tomkins criticized the government's impact on UK businesses, urging for a "more pro business stance" in the recent Budget. He suggested potential reductions in VAT on fuel and called for a government that actively engages with business leaders. "You cannot keep the tax burden going the way it is. It is creeping up and up and in the end will really harm the country if we don't have a better tax regime," he stated.

He cautioned that up to a third of some of the business's orders are now accounted for by fuel surcharges, with M and M Direct already paying an additional £8,000 daily in surcharges to transport providers. Daily, the company faces significant surcharges from couriers that ship goods overnight to consumers. "This is real – we are not passing on yet but how long can businesses carry on without increasing shipping and freight costs to our end users to the customer?" he questioned, emphasizing the difficulty of maintaining competitive deals if costs remain uncontrolled.

With diesel averaging 200.01 pence per liter, petrol prices are also escalating, reaching an average of 174.71 pence per liter, according to the RAC. The cost of filling a typical petrol car has risen to £96.09, an increase of £23.03 since February. The RAC previously warned that price rises were "showing no signs of slowing, heaping more misery onto motorists."

RAC policy head Simon Williams described the situation as a "price threshold no one wanted to cross," noting it would be "very challenging for households and companies that drive a lot of miles, from commuters, haulage and delivery firms, businesses with large fleets all the way through to sole traders."

In response to rising concerns, a government spokesperson stated that the country possesses "a diverse and resilient supply" and that the government "continue[s] to engage with our international partners and the UK fuel industry." Meanwhile, G7 nations have agreed to an emergency release of 100 million barrels of oil to attempt to curb future price increases, though a significant impact is not expected immediately. The record prices have been attributed to a combination of the Iran War and the ongoing conflict in Ukraine, further intensified by China's restrictions on refined fuel exports. UK farmers, heavily reliant on diesel for agricultural machinery and transport, have also expressed concerns about escalating costs.