Fear of fuel prices this Halloween
Although there’s no cast iron proof of ghosts, one tangible spectre hovers over the darkening months of this year: the uncertain price of fuel. “It’s an unsettling outlook for anyone running a fleet of vehicles,” says Steve Clarke, of The Fuelcard People. “But there are ways to ward off some of the cost challenges with smart fuel card choices”.
Recent trends look chilling. In September, British drivers were hit by the most expensive petrol and diesels costs for 2016, as oil prices around the world continue to drive uphill from the cost-saving lowlands of 2015. “The cost of unleaded petrol and diesel increased for the second month in a row, forcing the average price of diesel up to highest point for this year, while at the end of the month petrol was only just short of its highest point for 2016,” said Steve Clarke.
Diesel And Petrol
Steve quoted data from the motorist organisation RAC showing the average price of diesel fuel on UK forecourts increased by 0.42p in September to hit the 113.34p per litre mark, its most expensive price this year. At the same time, this data shows how a litre of petrol was still 112.07p by the end of September, up 0.48p from the beginning of the month and only just below the year’s highest price of 112.33p which it reached in August.
Surging Oil Price
“This recent trend of rising fuel prices in the UK follows the surging price of oil worldwide,” said Steve. “In January, the price of oil was just $28 per barrel. This has increased throughout 2016 to September’s price which was just shy of $50 per barrel.”
“The problem,” explains Steve, “is that Britain is experiencing a double-hit: at the same time the pound is weakening due to fears about the economy’s future after the Brexit vote, global oil prices are also rising. This places pressure on wholesale fuel prices, which is pushing the price further up at UK pumps.”
Following the pound’s recent sudden plunge by 6%, hitting a 31-year lower against the dollar, the wholesale price of petrol was more than 8p higher this month that it was at the beginning of August, while the wholesale price of diesel was nearly 10p higher.
“The real fright this Halloween,” observed Steve, “is that the world’s largest oil producers have also reached an agreement to limit oil production in an attempt to bolster prices. This has pushed the price of Brent crude beyond the $50 mark, but until more details are available it is hard to forecast how this will affect pump prices in the longer term.”