BUSINESSES in Exeter claim a  forecast rise in petrol prices  will further squeeze their incomes and have urged the Government to delay a duty increase.

The cost of fuel is set to soar to  a record high of £1.20 a litre in  the next few weeks.

And the news has left small  businesses — including taxi  drivers and driving instructors  —  bracing themselves for a hike  in their biggest expense.

The AA has issued the warning about the rises and asked  Chancellor Alistair Darling to  delay the introduction of a  planned 3p increase in petrol  duty due to come in on April 1.

Jo Burridge, of Iscal Driving  Tuition, in Queen Street, Exeter, said driving instructors  cannot pass the extra costs on to  customers.

“This is likely to affect us  quite heavily,” she said.

“Petrol is our main expense  so any increase is going to put  extra pressure on us.

“The driving instructor has to  bear the brunt of this cost and  most of us haven’t got the luxury of being able to put our  prices up because it is so competitive.

“The market has been flooded  by new instructors and putting  our prices up is not an option, so  we will have to absorb the extra  cost of higher fuel prices.”

Jennifer Lavin, office manager of FCD First Contact Driving, based in Exeter, added:  “The impact of these rises is a  real problem.

“We don’t get a dispensation  from the Government so it hits  us hard.

“Small businesses suffer  hugely when this happens.”

City taxi driver, Tony Hendicott, 51, who works for Capital  Taxis, said: “Financially, this  puts a lot of pressure on us.

“We are out working five or  six days a week and we have got  to keep our tanks filled up —  every litre is costing us extra  money.

“And we can’t put our costs  on to the customer every five  minutes.”

But one business which  claims to be prepared for the  fuel hike is Gemini Taxis, based  in Exeter, which is rolling out a  fleet of eco-cars. They say the  cars are both cheaper  to run and  more environmentally  friendly.

Business development manager for the company, Steve  Screech, said: “The rise in fuel  costs is not great news, however,  two years ago we introduced a  policy of bringing in eco-cars to  our fleet.

“We have spent the last  couple of years building up that  fleet and we have 11 of them at  the moment.

“It has brought down the fuel  cost by about 40 per cent.”

The average petrol price in  the UK is 115.9p for a litre of  unleaded and 116.6p for a litre of  diesel, according to www.petrolprices.com.

If the 3p increase is withdrawn, the price paid by drivers  could still hit 120p a litre — £5.41  a gallon — according to the  AA.

This would overtake the previous high of 119.7p in July  2008.

AA president Edmund King  said: “The UK is barely out of  recession, yet petrol prices  threaten to rise to record prices  seen during the boom of 2008 —  shortly before the collapse into  recession.”