As the cost of fuel continues to break records almost on a daily basis, the Daily Echo examines the impact on Hampshire's transport businesses - and how we will all end up paying the price...
HAMPSHIRE haulage firms fear they will go bust as the soaring price of fuel drives business to the wall.

Dozens of companies are struggling for survival after the cost of a litre of diesel rocketed more than 30p in the last year alone, while one firm says it will be gone by Christmas if fuel costs don't settle soon.

Terry Babey, of Babey TC Haulage, operated six lorries at the start of the year, but the Marchwood-based haulier was forced to reduce his fleet to two, and is now considering selling another lorry.

Terry said: "The major factor in having to get rid of the vehicles was the increase in fuel. It hits the small guys far worse than the big ones. It's all down to Government.

"I'm down to two vehicles and I'm thinking about getting rid of the other and just driving one myself. Off the top of my head it's costing me at least 25 per cent more this year.

"The winter months are the worst and if the prices continue to go up I'll be out of business by Christmas. Even if we had a change of Government now I don't think it would be quick enough to turn it round."

The price hikes, of up to 30 per cent, have caused haulier businesses across the county to disappear in recent years.

In May 2007, truckers were paying around 76p a litre, excluding VAT. Now prices have hit an all time high, with hauliers having to stump up about £1.08 a litre before tax.

According to research released by accounting firm UHY Hacker Young, haulage companies are three times more likely than the average business to go bust in the UK.

Derek Harris, of Totton hauliers Harris Transport, said: "The price hikes are crippling the haulage industry.

"No one in our game knows where they are going to end. We have 40 lorries in our fleet and we have seen the cost of running one lorry rise from about £800 a week to more than £1,100 in the last year."

More than 300 truckers staged a protest in London to call for the introduction of a rebate which would allow HGV drivers to claim back some of the fuel duty and have parity with bus companies.

They also want Gordon Brown to shelve a 2p increase in fuel duty and a planned hike in road tax.

Nursling-based Meachers - Southampton's biggest haulage company - has a fuel bill in excess of £1m a year, but chose not to join the high-profile protest.

"We support in principle what they are trying to do, but I think there are better ways of getting that message across," said commercial director Gary Whittle.

"I also understand and feel their frustration because it doesn't seem that we are going to get anywhere very fast. It doesn't seem as if there are an awful lot of people listening to what we are saying."

Mr Whittle said that, while hauliers were currently bearing the brunt of the sharp rise in fuel prices, the costs would eventually be passed on to the public.

"Sooner or later, you and I and everyone we know is going to pay for this increase. Sooner or later that is where it will end up. We can't absorb it and neither can our customers.

"If you look at the cost of your everyday consumables, such as your milk and bread, the costs are rising slowly, but whether they are rising in line with our costs is debatable.

"The only way this problem is going to be solved is if every retailer out there passes on the cost to the customer, unless fuel comes down.

"Somewhere along the line someone is going to end up paying for this, whether its haulage companies going out of business, which is happening on a weekly basis, or the customer."

According to figures released by the Road Haulage Association, a typical articulated truck that cost £35,000 a year to fuel 12 months ago now costs £49,000 a year to fuel.

RHA chief executive Roger King said only the Government was gaining from the increases, through its VAT.

"It already charges twice the rate of duty on diesel as the rest of the EU and it is having an income bonanza from the new increases," he said.

"It is surely inconceivable that the Treasury would go ahead with the 2p increase planned for October 1 and we call on the Chancellor to abandon that increase now."

Chancellor Alistair Darling this week hinted the 2p rise in fuel duty, due to come into force in October, was likely to be deferred.

Will Carson, James Maden and Peter Law