For the first time since July 2015, the cost of petrol went up last month, which could spell the end of recent ‘good times’ for fleet operators and drivers. According to industry experts, the 3.4p per litre (ppl) rise in average pump prices to 105p was on account of oil reaching US$40 a barrel for the first time since early December 2015.
Diesel forecourt prices also rose by 3.7ppl to 105p, even though wholesale prices only went up by 1.5p. Therefore, the cost of filling up an average 55-litre vehicle with unleaded or petrol has gone up by around £2.
Increasing profit margins
According to the RAC, retailers are either using the lower wholesale cost of diesel to subsidise the higher wholesale cost of petrol or want to increase their profit margins, as everyday motorists and fleet drivers were used to current prices not that long ago.
“The good times for motorists enjoying lower fuel prices had to come to an end at some point, but unfortunately it's happened with a bit more of a bump than motorists were probably expecting,” said RAC spokesman Simon Williams.
Later this month, oil producers will meet to discuss limiting their output, which could cause costs to rise further still. However, Williams believes that prices will reach a maximum of US$60 dollars a barrel in the short-term.
"It looks as though we are heading towards a new norm of the oil price fluctuating between lower and upper limits of 35 US dollars and 55 US dollars a barrel," he said. "This means that motorists should hopefully not see the eye-watering prices they were paying at the pumps in April 2012 when the average price of petrol was 142p and diesel was close to 150p per litre."
Dealing with price hikes
With the price of petrol and diesel rising, now is the perfect time to explore ways of reducing fuel costs across your fleet. One of the easiest and most effective options is fleet tracking technology, which also affords a number of additional advantages.
In addition to reducing vehicle speeds and decreasing idle times, you can also improve routing and dispatching, properly maintain vehicles in accordance with service schedules, and integrate fuel cards for greater visibility over petrol and diesel spending. The initial outlay might seem expensive, but it will be well worthwhile if fuel prices continue to increase.