Attributed to Paul Holland, MD of UK Fleet, Allstar Business Solutions
With the price of fuel on everybody’s minds, whether it is the price at the pump or the related price of electricity, it is important to step back and look at broad trends for what they can tell us about what’s ahead.
Volatility has been the norm in fuel prices for as far back as our data goes. Typically, swings might be around 0.5% to 1% per week – hardly something that deserves headlines. There was a general drop in early 2020, for obvious reasons, that took base prices to 77 pence per litre as opposed to their previous level of around 100 pence per litre. Then, in March of 2022, prices surged by 14.9% and after a 2.8% decline in April and a 2.8% increase in May, surged again by 10.8% in June. Prices dropped week on week throughout July, but we are still 44 pence above where we were a year ago.
Although nothing is ever certain when it comes to fuel prices, it is very likely that we could see a return to ‘normal’ over the next year. However, that does not mean an end to volatility – although the huge swings in prices we see at a macro level may subside, week by week, day by day volatility will always be a factor.
For fuel buyers this will be a continuing problem, meaning that budgeting will always be difficult – your company will always have to factor in the possibility that next week every litre of fuel will cost 2-3p more. For individuals this will barely register, but when you are buying huge amounts of fuel for multiple vehicles, possibly diesel too, it will soon become problematic unless you have the right tools in place to ensure complete control of your spend.