Fuel cost crisis: Prices continue to fluctuate

Fuel cost pressures continue with a number of factors playing a role in impacting prices at the pumps.

Diesel

A weaker Pound against the Dollar has impacted prices as well as the EU and UK’s embargo on Russian oil. At the same time, prices being reduced by Saudi Arabia has also effected Brent. Saudi oil firm Aramco has reported that oil prices of all types of crude for Europe, Asia, Europe and the Mediterranean for June will be reduced .

But continuing issues with Covid in China – and weak exports reported – as well as the overall impact of the crisis in Ukraine has meant that any certainty over prices created by either the US or Saudi Arabia will be offset by other global factors.

At the pump, diesel is on average at 178ppl last week, staying below 180ppl but equally now on an upward trajectory after several weeks of slight decline. It remains to be seen what the impact of weaker Chinese exports could have – if any – and if this will have any longer term effect.

Our figures show an average 44 tonne truck operating at 75,000 miles currently represents just under a third of operating costs for firms at present prices.

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Although high purity urea prices have softened a little over the past month – supply is an issue due to high gas costs in the manufacturing process from European producers.

Suppliers are looking further afield – but it is important to meet ISO 22231 standard when the product is being sourced. Prices are now double to even triple what they were a year ago – but it should be noted that on average it is less than 1% of the 44% costs of operating.

Trucks

As we have seen – and reported this month in Roadway Magazine – truck costs are typically up around 10% so far this year.

Last year’s heavy truck market expanded by 12% to 31,763, but that figure has to be seen against a pre-Covid level of 48,500 units and a dismal 2020. Even 2021 had its ups and downs. The second quarter of the year had the lowest level of UK truck registration ever, but there was a very strong recovery in the rest of the year.

All this translated into a continued healthy demand for commercial vehicles: large and small, but the demand was not necessarily translated into new vehicle sales. No chips meant no production: in the UK this knocked vehicle production down to low levels not seen since 1956 and the Suez crisis.

Truck manufacturers are rather less forthcoming, but Roadway understands from informal discussions with individuals that even at the start of 2022, waiting times were extended into 2023. Delivery times for tractor units are generally shorter than for rigids, even before the extra time required to body the chassis is taken into account.