The transport sector in the Balearics is bracing itself for a surge in the price of fuel. Companies are studying possible operational adjustments while calling on the Spanish Government to activate mechanisms like those implemented four years ago at the start of the war in Ukraine.
Fuel represents a third of companies’ operating costs, “so a sustained price increase could have direct consequences on the financial viability of many companies,” says Rafael Roig, president of the Balearic Transport Federation. Small businesses are particularly vulnerable as they already operate on very tight margins. Roig adds that the ripple effects of rising fuel prices will impact the economy as a whole, with the consumer bearing the brunt of the consequences.
While there are mechanisms for revising prices indexed to rising fuel costs, this is only applicable to large, stable contracts. For the small businesses in the freight transport sector, they will be the hardest hit. Trucks with 400 or 500-litre tanks are already facing an additional cost of 100 euros each time they fill up.
There is a double price increase because of shipping companies’ rising charges. “We also have to consider spare parts, which will also become more expensive. If transport costs go up, everything else goes up,” explains Ezequiel Horrach of the freight transport employers’ association. He is certain that there will be a major impact on the tourism season. “Although it’s still early and we’re in the initial phase of the conflict in the Middle East, we can already see the problems coming.”
Jeroni Valcaneras, president of the transport companies affiliated to the PIMEM federation of small to medium-sized businesses, is urging the government not to wait any longer. “They’ve committed to studying the possibility of activating coverage, but there’s not much to study. There will be an increase that will persist over time, and we see that other countries are already implementing measures.” If shipping rates were to increase by 30%, this would mean skyrocketing prices for consumers.
The shipping companies are at present closely monitoring the situation. Balearia indicate that they have not considered any special adjustments to their operations and that they have a large stock of fuel, given that it is customary to make large purchases.