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As we transitioned from 2022 to 2023, numerous changes disrupted fuel prices nationwide. Fuel duty rates altered, and crude oil costs fluctuated. Fleet managers had to adapt, strategise, and modify their operations to optimise their fuel expenses despite these external factors.
These almost erratic variations emphasised the importance of constant vigilance in fuel price trends. Awareness provides the clarity to spot and navigate potential hurdles with effective fuel management strategies.
With 2023 behind us, our focus now shifts to 2024. In an ever-evolving market, anticipation is power. Read on to explore the fuel price predictions for this year and the years ahead.
Lasting Factors from 2023 Currently Influencing Fuel Prices
When looking back to the HGV fuel price predictions for 2023, we saw that fuel prices were heavily influenced by a myriad of factors, which included economic conditions, political climate, and regulatory changes, both on a local and global scale.
The changing landscape of fuel prices across the UK, as reported by the Competition and Markets Authority (CMA), witnessed some significant events in 2023. The geopolitical factors, such as the decisions made by oil producer groups like OPEC+, were also critical, as any restrictions on oil production would lead to scarcity and thereby affect fuel prices.
According to the CMA’s first monitoring report on the road fuel market, pump prices for both petrol and diesel increased steadily: petrol by 11.1 pence per litre (ppl) and diesel by 13.9ppl from the end of May to October 2023.
These increases are divided into two distinct periods where various factors influence fuel prices. During June, July, and August, the increase ensued due to global factors, primarily the surge in crude oil prices. Petrol prices increased from 142.9ppl at the end of May 2023 to 154.0ppl by the end of October 2023. Simultaneously, diesel prices rose from 147.9ppl to 161.8ppl over the same period.
Wholesale Fuel Prices Compared to Retail Fuel Prices in 2024
A widening gap was revealed between wholesale and retail prices in September and October of 2023, despite a drop in wholesale prices, which could indicate a lack of competition among fuel retailers. This event is something the CMA plans to monitor closely throughout 2024.
The CMA further outlined the fuel margins (the difference between what a retailer pays for fuel and what they sell it at) of supermarkets, indicating a reduction over the previous June-August period. However, despite the decrease, August’s margins were still significantly higher than those for any year before 2021.
Interestingly, the report also pointed out a considerable increase in the retail spread for both petrol and diesel during September and October of 2023. This was done by comparing the average price drivers pay at the pump to the benchmarked price retailers purchase fuel at. What has emerged indicates that retail spreads could become a cause for concern about the intensity of retail competition in the road fuel market if this trend persists. Additionally, this disparity in fuel prices is having a profoundly negative effect on businesses that rely on fuel cards and making on-site fuel storage a more reliable choice.
Our Recommendation: Invest in Wholesale Fuel with On-site Storage
With industry, projections suggest that wholesale fuel prices will continue to undersell their retail counterparts significantly. In response, many commercial fleets are pivoting towards fuel management equipment that will enable them to invest in wholesale fuel. Infrastructure such as:
- On-site storage with tailored capacity fuel tanks
- On-site pumps for dispensing wholesale fuel
- Wireless monitoring software
Leveraging this popular trend offers considerable cost savings and operational benefits for any business regarding fuel expenses. At Fueltek, we provide a Complete Fuel Management Package that offers an end-to-end solution to harness these advantages comprehensively.
This popular package essentially empowers businesses to establish their own on-site fuel stations. With personalised capacity, diesel and AdBlue pumps, and fuel management systems, you will store and dispense multiple products effectively. Our associated fuel monitoring systems offer accurate tracking for both on and off-site fuel usage. You gain the capability to monitor each product in every compartment of the storage tank, providing a variance figure between pump and tank throughputs.
Our solutions are not just for managing fuel; they integrate fuel management with opportunities to optimise efficiency and prevent loss. Real-time information on fuel usage delivers crucial data automatically to fleet managers, enabling proactive decision-making. This comprehensive approach eliminates outdated stocktaking and delivery management methods, replacing them with instant updates and solutions accessible from your phone.
Long-Term Fuel Price Projections for Wholesale Fuel Prices Globally
As we continue to look forward, examining long-term predictions for wholesale fuel prices in the UK up to 2040 becomes vital. By doing so, we can offer more informed and strategic insights to our commercial fleet partners. These businesses, already invested in wholesale fuel through their on-site fuel management and storage infrastructure, can benefit greatly from this foresight.
According to Statista, projections indicate a steady rise in wholesale fuel prices over the next two decades.
Forecasting trends imply a continuous surge in British gas prices until 2035, providing a window into a future where prices may stabilise. As 2035 rolls around, we are looking at potential price tags of 43, 64, and 88 British pence per therm for low, central, and high projections, respectively.
These projections do not exist in a vacuum. Rather, the UK Government deploys them for policy appraisals and intricate modelling efforts. An array of external factors swings the pendulum of gas prices. This information holds vital significance for commercial fleet managers looking to reduce their fuel costs. It highlights the importance of holistic, strategic, long-term planning for commercial fleet businesses that wish to stay competitive and thrive in an evolving industry landscape.
Fuel Efficiency Solutions at Fueltek
With our work supporting businesses as they invest in financial benefits from wholesale fuel purchases, we know that reliable and accurate fuel price projections are the cornerstones for managing fuel resources and costs effectively.
Our commitment to providing efficient fuel management systems enables our clients to navigate these price fluctuations and shifts in the industry with confidence. By continually embracing technology and innovation within our own systems, we ensure that our clients can face emerging challenges head-on and turn them into opportunities for growth and success.
Contact us to discuss what your business needs are and find out how we will fulfil them so you can successfully reduce your fuel expenses this year.
For more information on 2024 Fuel Price Predictions for Commercial Fleets talk to Fueltek Ltd