Spiralling fuel costs are continuing to cripple businesses in the South West, in spite of the Government’s decision to postpone a rise in fuel duty until the summer.

That was the verdict of a survey of small businesses in the region which found just over half complained high fuel costs were taking their toll.

The Close Business Barometer, an online survey which benchmarks key issues for smaller firms, said 51 per cent of firms in the region felt fuel prices were having a negative impact.

Steve Durston, of Steve Durston International Haulage in Okehampton, said: “High fuel charges are putting haulage companies out of business.

“Our costs are going up and up and you can’t pass that on to the customer, so you’re caught between a rock and a hard place. I know one of our clients is relocating from Devon because of the transport costs.”

Despite coming under increasing pressure to ease the burden on motorists, Chancellor George Osborne has indicated there is no extra money for tax cuts on fuel in next month’s budget.

The Government claims it has already helped beleaguered motorists and hauliers after deferring a planned 3p per litre rise on fuel duty until August. But with prices at the pumps expected to exceed last May’s record highs of 143p per litre, businesses are warning that the price of fuel is holding back the economy.

Rob Harris, the regional head of Close Invoice Finance, which is behind the survey, said: “From talking to our clients in all sectors, the general consensus is that rising fuel costs remain one of their main concerns on a daily basis. This is having a huge impact on operating costs for firms of all sizes, with small and medium enterprises in particular being hardest hit.

“Bearing in mind that firms are already suffering, having been hit hard by the economic misery of recent years, coupled with consumer confidence being at an all-time low, it is not hard to see how increased fuel costs are causing firms a lot of additional pressure, which is ultimately pushing some beyond their limits.”

Some 11 per cent of businesses said they are being forced to pass some of these costs on to the people they rely on the most – the customer.

But Mr Harris said the increased cost of fuel is just one of a number of issues impacting on firms in the South West. Companies up and down the region are struggling to cope under the strain of the current economic landscape which has forced businesses and consumers alike to rein in spending.

“The fact that these increased costs are having to be passed on to customers does nothing to help companies, who are already struggling to survive, attract new business or hold on to current customers,” he added.

The survey also found businesses are feeling the squeeze on tougher payment terms, with firms being given less time to pay suppliers and having to wait longer to receive payment from customers.

Some 47 per cent of firms cite late payments as a major issue for their business and of these firms, 40 per cent are forced to wait longer than 30 days for payment.

The Retail Motor Industry (RMI), the petrol retailers’ association, said higher prices could affect plans to tackle inflation and place “the livelihoods of hundreds of fuel retailers at further risk”.

Brian Madderson, the RMI Petrol chairman, said: “This is causing a lot of pain for businesses, especially small haulage companies who find it difficult to pass on the price increase to customers.”

Motorists on the Isles of Scilly will benefit from a 5-pence-per-litre discount on fuel prices from today.

The Government announced last year that the EU had sanctioned an islands-only rural fuel rebate “pilot” scheme.

More than 90 businesses on the Scillies and the remote Scottish islands – where the scheme is applicable – have applied. Pump prices are particularly high in these areas due to high transportation costs.

St Ives MP Andrew George, whose constituency includes the Isles of Scilly, called for the scheme to be rolled-out to remote rural areas on the mainland.