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After the cost of fuel prices increased so significantly in 2022, with the average price of petrol hitting 191.53p-per-litre and diesel reaching 199.05p in July, many fleet operators are concerned about what fuel prices might look like for 2024.
At Fleetsmart, we know that fuel charges are one of the most significant costs associated with running a fleet, which is why we’re going to be looking at some of the latest fuel price predictions for 2024 and explaining how you can keep running costs down for your fleet this year.
First, let’s take a look at why fuel prices fluctuated so much last year.
There two key factors which impact fuel prices are:
The reason why the cost of crude oil directly impacts petrol and diesel prices as well as wholesale fuel prices is because crude oil is used to make petrol and diesel.
Following Russia’s invasion of Ukraine on 24 February 2022, and the sanctions of Russia's oil exports, the cost of cruise oil increased above $105 per barrel (compared to $40 in 2020), with Brent crude climbing to almost $139 per barrel on 7th March as new sanctions were imposed on Russian oil exports.
With many European countries relying on Russia’s oil and gas reserves for its supplies, Western leaders pledged to cut their supplies from Russia and source them from other countries.
This has meant that the demand for petrol from other countries skyrocketed, so despite just 8% of the UK’s oil imports coming from Russia, we still saw price increases on all petroleum products.
Fuel prices are subject to a multitude of factors, both domestic and international, making accurate predictions a complex task. However, by examining various influencing factors and expert insights, we can gain a clearer picture of what to expect in 2024.
Global Oil Market Dynamics:
The global oil market plays a pivotal role in determining fuel prices in the UK. Factors such as oil production levels, geopolitical tensions in oil-producing regions, and changes in global demand heavily influence oil prices.
Analysts anticipate continued volatility in the oil market due to geopolitical uncertainties, shifts in production levels, and geopolitical tensions.
Domestic Economic Conditions:
Economic factors within the UK, such as inflation rates, currency strength, and consumer spending patterns, also impact fuel prices.
As the economy continues to recover from the effects of the COVID-19 pandemic, economic growth projections and government policies will significantly influence fuel demand and, consequently, prices.
Environmental Regulations:
Environmental regulations, including carbon taxes and emissions targets, are increasingly shaping energy markets worldwide.
The UK government's commitment to reducing carbon emissions and transitioning to cleaner fuels may affect fuel prices through taxes, incentives for electric vehicles, and renewable energy initiatives.
With an expected hike in fuel duty to come, it’s crucial, now more than ever, for businesses to find ways they can reduce their fuel consumption wherever possible in order to keep operating costs low.
One of the most effective ways to do this is by implementing vehicle tracking devices in your fleet vehicles. Here’s how fleet vehicle tracking could help cut your fuel costs.
Did you know that driving style can have a significant impact on the amount of petrol or diesel a vehicle consumes? The Energy Saving Trust states that by driving more efficiently and increasing vehicle utilisation, operating costs can decrease by up to 10% annually and fuel usage can be reduced by as much as 15%!
Luckily, fleet tracking is a very powerful tool that allows you to have complete visibility of your fleet vehicles at all times, including real-time GPS location, routing, vehicle reports and journey replay- all of which can be used to evaluate driving styles and pinpoint any inefficient driving techniques, such as prolonged idling or harsh acceleration.
By using the insights provided by your driver's behaviour data, you can take steps to provide additional training where necessary, to decrease occurrences such as heavy braking, rapid acceleration, and speeding, all of which decrease the fuel efficiency of your vehicles.
Fleetsmart vehicle tracking features Advanced Mapping that empowers fleet managers to plot out specific routes on a map, ensuring that their drivers are taking the most efficient journeys in order to avoid wasting time and fuel (and ultimately money) by taking unnecessarily longer routes.
Regardless of the size of your fleet, whether it's 10 or 10,000 vehicles, it's crucial to seek out ways to cut costs within your business, starting with fuel expenses. Although it may appear counterintuitive to invest in vehicle tracking while trying to save money, Fleetsmart tracking devices are a smart and valuable investment.
In fact, we would typically expect a return on investment for an average business to be within 90 days, which includes any initial payments and also covering a full year's subscription.
Fleets with a more significant potential for improvement can expect a much quicker return on investment with typical savings experienced per vehicle being £1,000-£2,000 per annum!
Reach out to our team of fleet experts today to discuss how we can help your business save money.