COACH operators who run school transport services in Pembrokeshire are calling for a fuel duty rebate to be extended, to cushion the blow from a proposed tax rise in the November budget.

Currently, companies like Jones of Login and the Silcox Motor Coach Company Ltd, are entitled to a rebate on the fuel they use for running local services.

But this agreement, known as the bus service operator's grant, does not extend to services such as school transport.

With another tax rise imminent next month, coach companies suggest it will add financial pressure to a sector where margins are already tight.

Endaf Jones, managing director of Jones of Login, believes it is time for a rethink. "I think it would be fair to say that the school service is a public service and as such should qualify for this grant,'' said Mr Jones, who runs a fleet of 18 coaches.

"With recent rises in the price of fuel and now another duty increase, the pressure on businesses like ours is intense. Our contracts often don't take into account these rises.'' Many other sectors will be hit by the fuel duty hike, including haulage companies and farmers.

There will also be indirect costs to consumers because these companies will be unable to fully absorb another rise to their overheads.

Pembrokeshire Business Initiative managing director Richard Packman said peripheral counties like Pembrokeshire would be hit hardest, because of the long distances involved in transporting goods to and from the county.

"These businesses will eventually have to put up their prices if they are to continue to be profitable, or they will have to look for efficiency savings elsewhere,'' he said.

Consort Equipment Products Ltd imports sheets of steel to its Milford Haven factory. It exports its steel products across the world.

Purchasing director Chris Banks stressed that the company didn't run its own transport division, but it was directly affected by any fuel duty increase.

"What astonishes me is the variation in duty between the UK and the rest of the EC,'' he said.

HAVERFORDWEST-based growers' co-operative, Puffin Produce, said it was still unclear how the proposed duty increase would affect its contract with supermarket giant ASDA.

Thousands of tonnes of potatoes, cauliflowers and other vegetables are hauled out of its Withybush pack house every year.

"All our ASDA orders are back-hauled on ASDA lorries. We have had no communication about changes to the current arrangements,'' said managing director, Martin Cox.