A survey found small firms are passing on increased fuel costs

More than half of small firms have already started to pass on increased fuel costs to their customers, according to a new report.

A survey of 300 smaller companies by Bibby Financial Services showed that four out of five were feeling the effect of the rising price of fuel, with many cutting back on road journeys.

One in five of those polled said they were under pressure to increase fuel-related allowances to their staff.

Firms in rural areas were hardest hit by the fuel crisis, although industrial regions such as the West Midlands were also suffering, according to the findings.

David Robertson, chief executive of Bibby Financial Services, said: "This survey gives a voice to the impact that heightened transport issues, particularly surrounding fuel costs, are having on Britain's small and medium sized businesses.

"There are many companies already carrying out and planning solutions to the problem of increased fuel costs, which is encouraging, but the majority of businesses are yet to take action.

"Owners and managers must take steps now to fortify their cash flow and reduce the risk of the fuel crisis on their business from being any greater than it already is."