Fuel prices nudging £1 a litre are set to hit West Midlands companies hard and could lead to job cuts in the New Year, experts at accountants PKF have warned.
Robert Hudson, a partner at the firm's Birmingham office, said: "Low inflation benefits the economy generally, but it also makes it very difficult for businesses to pass on expenses such as fuel cost rises to customers.
"Not every business has the strength of the airlines whose fuel bills have rocketed along with everyone else. They have imposed fuel surcharges that are clearly identified as being on top of the normal price of a flight.
"For other businesses, the costs are equally hard to bear but it is difficult in an ultracompetitive marketplace to push prices up, whatever the reason. Businesses seeking to make cuts to protect their profitability will look to that favourite old warhorse, job losses.
"They may also consider cutbacks in training and marketing and advertising spend."
He said that it was more important than ever that companies got close to their customers and discussed possible solutions with them.
"These include giving them the option of taking larger deliveries and carrying more stock, or of collecting deliveries themselves, or where just in time deliveries are an essential part of the production process of renegotiating terms to reflect the dramatic increase in fuel costs," he said.
The average cost of a litre of unleaded petrol has passed 90p, having risen from 80p a litre in January and now industry experts are predicting that the £1 litre is not far away, albeit this week prices have dropped off a high of $67 to the barrel to around $63.
But Mr Hudson pointed out that it was not just fuel prices that were affected by rising oil prices.
"Petroleum has many byproducts such as plastics and higher fuel costs will also push up energy costs for industry.
"This is all adding up to a highly dangerous inflationary cocktail and it is something that the Government must address soon or risk an economic imbalance which could seriously affect Chancellor Gordon Brown's fiscal assumptions.
"Whereas he is making more money on fuel duty, in the long term the country will suffer more severely from an industrial slowdown and increasing factory gate prices."
Even the very biggest companies are hurting.
For example, earlier this week Asda owner Wal-Mart, despite posting record firsthalf profits, warned higher fuel prices were taking their toll.
The American retail giant said net sales rose 9.8 per cent to $147.7 billion (£81.7 billion) in the six months to July 31, while net profits lifted 9.3 per cent to $5.3 billion (£2.9 billion).
Nevertheless president and chief executive Lee Scott said the results were "disappointing".
He said: "Wal-Mart stores did miss their plan as our customer continues to be impacted by higher gas ( petrol) prices and it is difficult to improve our expense leverage in the current environment."
Wal-Mart gave no breakdown of Asda's performance, but said its international operations increased operating profits by 8.1 per cent to $1.4 billion (£770 million) in the first half.
The company also has operations in Argentina, Brazil, Canada, China, Germany, Japan, Mexico, Puerto Rico and South Korea.
Asda recently unveiled a radical shake-up that cost hundreds of management posts, allowing it to invest in more than 2,000 shop floor jobs.