Why are fuel prices going up in the UK?
Written by: Marion Hanson, Last updated:21st August 2024
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 are fuel prices going up in the UK?
Petrol prices in the UK have surged in 2024. This increase is driven primarily by geopolitical tensions in the Middle East, particularly involving Israel and Iran, which have pushed up wholesale oil costs.
Additionally, the start of the driving season in the USA, where there is a high demand for fuel due to leisure trips in July, has further strained global supply.
Despite efforts by the UK Chancellor to mitigate costs by freezing fuel duty and maintaining a 5p cut in prices, retail dynamics have also played a role, with retailers taking larger margins, especially on diesel. This price hike, which has made petrol the most expensive since November 2023, poses challenges for consumers and businesses, contributing to inflation and affecting travel budgets.
Current fuel prices UK
Government data shows that fuel prices are still increasing weekly, going from an average of 144.67 pence per litre of petrol, compared to 150.58 pence per litre for diesel.
With such high prices for diesel, if you are buying more cars for a fleet soon, 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
How to reduce fuel costs for your business
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.
You can utilise our quick and easy fuel card selector to see which fuel card would be best for your business, or complete our short form to receive a free quote today.
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 2024, 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
