Royal Mail is considering applying a fuel surcharge to some of its contract parcels and mail services, while rival carrier UK Mail has reduced parcel prices for SMEs.

If approved, Royal Mail plans to increase prices for contract parcels and mail customers to account for the rising cost of fuel from 1 April.

A spokesman for Royal Mail Group said: “Fuel surcharging is standard practice in the parcels delivery market. Royal Mail does not currently apply a surcharge to the contract prices for parcels.”

However, rival parcel firm UK Mail has lowered the price of next day parcels for SMEs by 50p in response to the increase in online retail sales.

The reduction, which applies to all parcel sizes and distances, was made by UK Mail’s SME parcel delivery and collection service ipostparcels, which processes all parcels through the parent company’s network.

UK Mail chief executive Guy Buswell said: “We want to be able to offer our customers attractive services and prices, so therefore after a review of the market place and with studies showing home businesses and small retailers are on the rise we decided to make substantial price cuts to provide an even better offering to our customers.”

Its standard next day delivery service has been reduced to £4.49 while its 2-3 day delivery service has been lowered to £3.39.

If approved, Royal Mail’s fuel surcharge will not apply to non-contract or consumer parcels.