UK coach firms diesel prices crisis: what it means for you

The UK coach firms diesel prices crisis could reach passengers, schools and community groups, according to the trade body that speaks for the industry. Alison Edwards, director of policy at the Confederation of Passenger Transport (CPT), said fuel had “surged this year to unsustainable levels, pushing coach operators’ already tight margins to breaking point”. She told The Independent and The Guardian that services, including home-to-school transport, could be cut.

No fare rise or service cut has been announced in the reporting so far. What operators are describing is a warning about the choices they may face if costs stay high.

The change in plain English: coach industry fuel costs at a record

The price of diesel hit £2 a litre for the first time on Thursday 1 October, The Independent reported. The Guardian said the average price on UK forecourts reached a fresh record of more than £2 a litre last week, as the war in the Middle East continues to disrupt global fuel supplies. The Independent said the price of a litre of fuel in the UK has risen 40.5% since late February, when the US first launched strikes against Iran.

The CPT represents 800 members across the bus and coach industry. Ms Edwards said 85% of independent coach operators are family businesses, and that the government “must step in” with temporary help towards the cost of diesel. “In usual times, they receive no government investment,” she said. “But the industry needs help as the cost of diesel hits a record high.”

The Guardian reported that local bus operators in England have already received subsidies to help cover running costs. Coach companies, which say they play a similar role, have received no equivalent support.

Who pays more: diesel price impact on transport operators and their customers

The first to pay are the operators themselves. The Road Haulage Association (RHA), which speaks for lorry firms facing the same pressure, said its members typically work on profit margins of about 2%. Its managing director, Richard Smith, said hauliers were paying an extra £350 a week for each truck compared with before the Iran war.

Whether customers end up paying depends on whether firms can pass the cost on. Mr Smith said: “If haulage, coach and van operators can’t pass these costs on, they struggle, and we’ve seen hundreds of transport businesses going bust already this year.” Rhys Hackling of Direct Connect Logistics put it more bluntly: “Somebody somewhere is having to pay for this, whether it’s the haulage firm or whether it’s the consumer.”

For coach users, Ms Edwards set out the likely effects. “Fewer coach journeys will mean fewer school and educational trips, reduced transport options for community groups and sports clubs, and fewer visitors spending money in towns, cities and attractions across the UK.” She cited KPMG research for the CPT that found coach passengers generate £8.3 billion of spending in local economies each year, including £5.4 billion at tourist destinations.

A worked example: what a 30% rise in fuel spending looks like

The Guardian gave a concrete case from the haulage side, which shows how the arithmetic works for a fleet. Direct Connect Logistics runs 22 lorries and told the paper it “normally” spends about £50,000 a month on fuel, but that the bill was now “knocking on £65,000”. The calculations below are ours, based on those two figures.

Set that against a 2% margin. A business turning over £100,000 would keep about £2,000 as profit, so a cost increase of even a few per cent can wipe that out. Mr Hackling said many hauliers work on fixed contracts, which means rising fuel costs “squeeze or wipe out their margins entirely”. Coach firms with fixed-price school or tour contracts could face the same problem, though the sources do not give coach-specific figures.

As a simple illustration for a driver, if a litre costing £2 today had risen by the 40.5% reported for fuel since late February, it would have cost about £1.42 then. On a 100-litre fill, that is roughly £200 now against £142. The 40.5% figure covers fuel generally, so treat the diesel comparison as a guide only.

What to do now if you rely on coach services

If you book coaches for a school, club or group trip, ask your operator early whether the quoted price is fixed and for how long. Quotes given before the recent rises may not hold for later dates, and the sources do not say how firms will treat existing bookings. Getting the terms in writing avoids surprises.

Parents who rely on home-to-school transport should check with their local authority or school about whether any change is planned. The CPT has warned that this service is among those at risk, but it has not named any area or contract. Community groups and sports clubs may want to ask for a second quote, and to book earlier than usual for busy periods.

If you want to follow the policy side, watch for any decision on fuel duty. The RAC has called for the government to expand its 5p cut in fuel duty, which has been extended until the end of the year. Hauliers are asking for a pause on planned fuel duty rises and a rebate to help offset diesel costs.

Your questions answered

What are the current diesel prices in the UK?

The Independent reported that diesel hit £2 a litre for the first time on Thursday 1 October. The Guardian said the average price on UK forecourts was more than £2 a litre last week, a fresh record. Prices vary by forecourt, so the price near you may differ from the average.

What are the predictions for diesel prices in the UK?

The sources give no price forecast. The Guardian reported that G7 leaders said on Friday they would release up to 100m barrels of emergency diesel and crude oil stocks, which offers some hope that prices might ease. It said this appears to have averted a threatened US ban on diesel exports, which could have pushed UK prices higher, since Britain relies on the US for about a third of its diesel imports. Transport minister Keir Mather has said the UK’s fuel supply is “inherently resilient” and that people “shouldn’t be concerned about shortages”.

How does fuel feed into official inflation figures?

The Office for National Statistics says its consumer price indices track a basket of goods and services, and that the price of items such as petrol may rise while others fall. In its 2017 weights, transport accounts for 126 parts per 1,000 of the CPIH. The ONS guide does not link that figure to the current diesel rise, so it cannot tell us how much of the increase will show up in inflation.