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There is ‘no sign' of the higher fuel prices reported over the last month ‘significantly dropping', the chief executive of the Association for Public Service Excellence (APSE) has warned councils.An APSE survey found rising fuel costs driven by tensions in the Middle East were adding pressure to council budgets, with more than a quarter of respondents considering the impact of recent fuel price increases on their local authority to be ‘very significant'. While the price rises are primarily creating cost and budgetary pressures rather than supply shortages, a third of respondents said they were ‘very concerned' about the potential impact of fuel prices and shortages on their fleet operations. Less than half of those surveyed said they had a business continuity plan in place to deal with potential fuel shortages, though most of the remainder reported they were in the process of developing one. Speaking to The MJ, APSE boss Mo Baines said: ‘We've embedded those high prices and that could continue for the next few months, which will add to the financial pressures on councils that never go down as fast as they go up.'Oil prices rocketing to their highest level since 2022 will lead to worries the global energy shock will feed through to a sharp increase in UK inflation if the Middle East conflict continues to rage.Chief executive lead for finance at the Local Councils Network, Ian Miller, said: ‘Ultimately, it's an inflationary pressure and, just like the inflationary spike we had after Russia's illegal invasion of Ukraine and previous inflationary spikes, they hit local government.‘Councils will be protected if they've already let a contract but the next time you come to a contract in three or six months you will have to pay whatever the market rate is at that time. Down the track, this creates a problem if budgets are fixed: your pound will go less far particularly in things like capital projects.'A spokesperson for the Society of County Treasurers said higher inflation was likely to feed into interest rate hikes, which will have an impact on the costs of borrowing and any large infrastructure projects.Group business development director at the Norfolk CC-owned outsourcer Norse Group, Geoff Tucker, added: ‘The contractors are going to come along with very significant price increases, and the councils are going to end up paying, one way or the other whether they are inhouse or outsourced.'Tucker also pointed out many council staff who rely on their own transport to travel to and from work would be affected and he had already heard of a couple of councils adopting a more relaxed stance to allowing staff to work from home in order to cut commuting costs.‘If the signs are it's going to last a long time, then there's going to have to be a rethink. We're already looking at how can we re-engineer services. If services are outsourced, councils may have to get the providers in and say, if we can't give you a load more money, we're going to have to find ways of paring back services.'Tucker added cost of living increases would fuel demands for higher pay, ‘particularly in a fairly unionised sector'.President of the Association of Directors of Adult Services, Phil Holmes, said: ‘Care workers who deliver care and support to people in their own homes are increasingly worried about fuel prices.'In the wake of the Iran-US conflict councils could be hit by a surge in inflation, insecurity of fuel supplies, demands for higher pay and more pressure on the Crisis and Resilience Fund. David Blackman reports.

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APSE

Fuel prices to remain high for councils, APSE chief warns

By David Blackman, William Eichler | 05 May 2026

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