Rising Fuel Prices in 2022: How Businesses Can Save Money
16th March 2022
If you are a car owner or manage vehicles as part of your business, you will have noticed that you’re paying a lot more to fill up a tank recently. With record breaking highs in fuel prices, recent world events have meant that we’re forced to spend more to travel the same distances.
Tom Cosway, Head of Commercial Business at Fuel Card Services says “Rising fuel prices are forcing UK businesses to find solutions that reduce their operating costs. Doing so could be crucial to remaining competitive in the coming months.”
In this article, we’re going to take a look at why this is happening, and explore what practical steps business owners can take to reduce costs faced for company vehicles.
Why have fuel prices gone up in the UK?
Over the past year, the cost of crude oil has increased globally resulting in us paying more at the pump for petrol and diesel. However, in more recent weeks the price of fuel has risen significantly following the ongoing conflict in Ukraine.
Russia exports 11% of the global total of oil and is the third largest oil exporter in the world according to Sky News. Following Russia’s invasion of Ukraine, countries such as Canada and the US have responded by ceasing imports from the country. Not only due to moral reasons, but also because of concerns that oil may not be delivered or transactions may not go through due to disruptions to banking.
As a result of countries no longer relying on Russia for their oil, there is a strain on resources for other oil producers who are now in higher demand. Consequently, prices of crude oil have increased globally due to this increased demand.
How does Russia impact the UK’s fuel prices?
Although the UK is not reliant on oil from Russia, and only imports around 5% of its oil from the country, global shifts in price have an impact on what we pay as customers. The price for one barrel of Brent crude oil increased to $139 on 7th March – the highest it has been in 14 years.
Government data shows that fuel prices are still increasing week on week, going from 152.95p per litre for petrol on 7th March to 159.96p on 14th March 2022. The same can be said for diesel, increasing from 158.56p to 169.48p. With such high prices for diesel, if you are buying more cars for a fleet soon, it may be a good time to think about the pros and cons of buying a petrol vs diesel car.
What causes changes in the cost of fuel?
The price you pay for petrol and diesel is impacted by the following factors:
- Supply and demand for oil.
- The price of crude oil globally.
- Combined wholesale cost, distribution cost and retail margin
- VAT charged
- Fuel duty owed to the government
- Exchange rates from dollar to pounds
What can your business do to reduce fuel costs?
For businesses in the UK managing multiple vehicles, it’s now more important than ever to do what you can to save money on the cost of fuel. There are different options that can be taken for managing your fleet effectively to reduce outgoings on fuel.
1. Save money with a fuel card
A great method of saving money on fuel for business vehicles is using a fuel card, as you can achieve discounts on every mile. Working with all major fuel brands, Fuel Card Services can offer savings of up to 10p per litre when you use a fuel card.
2. Use fleet management solutions
Using fleet management software solutions can allow businesses to take control of their fleet from all over the UK and make efficiencies to reduce costs.
By implementing an effective telematics system, vehicles can be tracked, and routes can be planned to ensure the most fuel-efficient route is taken. Telematics can also save you money by directing drivers to the cheapest and most practical petrol stations. You can read more about the many benefits of using Tele-Gence Telematics and how this could be a useful solution to reduce costs for your business.
Not only this, Fuel Card Services offers fleet management options that help to get vehicles fixed or serviced at pre-negotiated rates. So, for fleet operators, vehicle maintenance could be an interesting area in which you could look to make cost-savings.
Cut costs on your business’ fuel today
Operational costs have always been a key expenditure that small to medium-sized businesses have had to contend with. In 2022, this is certainly the case, and the rising cost of fuel is causing cash flow challenges for businesses across the globe.
Consequently, it’s now more important than ever that businesses look to make efficiencies in small ways to remain competitive. Whether that involves investing in a fuel card to save money on business mileage, or introducing new technology to improve fleet efficiency, Fuel Card Services has a solution that could help.
You can get a free quote online or apply now for fuel cards and fleet management services from Fuel Card Services. If you would like assistance in choosing the right fuel card or fleet management solution, you can contact us today to speak to one of our experts.back