For Loaders Coaches, our local school bus service for students across Grenfell and Young, rising fuel prices are beginning to bite.

Mark Loader, owner of Loaders Coaches, said the recent jump in diesel prices is creating pressure for the business.

The company runs around 11 school bus routes between Grenfell and Young transporting students each day, along with a small amount of charter and tour work.

Mark said the rapid increase in fuel costs, rising by more than $1 a litre at some Grenfell service stations, is making things difficult.

"It is having an affect," Mark said.

While school bus services operate under government contracts that are adjusted monthly to account for fuel price changes, the business still has to cover the costs upfront.

"We still have to pay the money before we get the adjustment. So it is a bit of a tight time at the moment."

The biggest impact could be felt on the business' charter and tour work where quotes are often locked-in months ahead.

"If we've already given a quote, we can't change it just because fuel has gone up," Mark said.

"So we've just got to live with it and sometimes that means running those trips at a loss."

Mark estimated that the business uses around 1500 litres of fuel per week across its operations.

In recent years the company has scaled back its longer tour work due to staffing challenges, focusing more on local charters such as school excursions, sporting trips and occasional work replacing train services for NSW TrainLink.

Another concern on the horizon for the business is the possibility of fuel shortages.

"We don't know what's going to happen in the next two or three weeks," Mark said.

"There's talk about fuel shortages [across the country], so we'll just have to wait and see."

So far the company has not had trouble sourcing fuel, buying locally from service stations in both Grenfell and Young.

Suppliers have indicated that fuel should remain available for essential services such as school buses.

If a shortage did ooccur, government-run school bus services could be suspended under emergency provisions while charter and tour trips would simply have to be cancelled.

Mark says the situation remains uncertain and the business will have to wait to see what happens in the coming weeks.