Some Cape Breton businesses are finding themselves in a balancing act as the war in Iran has caused the price of fuel to spike.

On Tuesday, fuel prices were changed for the sixth time in March outside of the Nova Scotia Energy Board’s weekly Friday price setting.

Supply disruptions in the Strait of Hormuz, where a large portion of the world’s oil travels, is fuelling rising costs. The strait allows passage to refineries and oil producers in places such as Saudi Arabia, Iran, Kuwait and Iraq.

In Cape Breton, a litre of gas is selling for a maximum of $1.913 per litre and $2.47 per litre for diesel.

For Northern Contracting Limited in Sydney Mines, this means it’s spending almost $5,000 more a day on fuel.

“It’s a huge increase in pricing that has to somehow get absorbed and passed on to our customers,” said company president Sheldon Marinelli.

Hefty fuel bill

He said the company has about 22 trucks, each of which burns an average of 300 litres per day. With rising costs, the company is spending about $200 more per truck, per day, on fuel.

The company is having to absorb some of these costs, as not all of their contracts allow room for fuel surcharges. It’s also weighing how increasing its prices would position the company in the market.

NCL is one of Cape Breton’s largest heavy civil contractors, constructing highways and working on projects with Nova Scotia Power. It employs up to 400 people during the summer months.

Andrew MacDonald owns AMD Landscaping and Tree Service, which operates in the Cape Breton Regional Municipality.

“It’s going to be an awful big hit on small businesses like mine,” he said.

Patrick De Haan, lead petroleum analyst with GasBuddy, said fuel prices are nearing all-time highs. In Halifax, diesel prices are around 10 cents per litre away from surpassing records set in 2022 after Russia’s invasion of Ukraine.

“We certainly could see that in the days ahead,” De Haan said.

Even if the war in Iran were to end, De Haan said a return to normal depends more on what happens with the Strait of Hormuz.

De Haan said once the situation in the Strait of Hormuz becomes clearer, oil prices may decline. He said gasoline prices should follow within a few days.

Chris Eyking, manager and owner of Hilly Acres Farms and Eyking Farm on Boularderie Island, said that along with buying diesel for farm equipment, chicken feed is costing him more these days.

Eyking expects the price of fertilizer to go up, and if the situation doesn’t change, he said consumers may have to pay more for eggs soon.

Osborne Burke, manager of operations at Victoria Co-operative Fisheries Ltd., said beyond the higher costs of fueling fishing boats and trucks for shipping, he worries about consumer response.

He wonders if consumers will shift away from what they might consider to be more “luxury items,” such as lobster, crabs and scallops.

“Everybody is impacted by the increase in fuel,” he said.

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