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The Cost of Petrol for Individuals and Small Businesses

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The cost of petrol has reached the highest level on record with it predicted to rise. As a result, the average daily price for a litre reached 142.94p, a whole 28p per litre more than a year ago.

With most larger vans and lorries using diesel, it’s the smaller vans and cars that will be affected the most. As a consequence, the increased cost of fuel will cause further financial pressure for smaller businesses and households. Even though a lot of us are still working from home or have moved to flexible working, drivers are still just as reliant on their cars with many having no alternative.

Why has the cost of petrol increased?

Global oil market prices have more than doubled from £29.64 a barrel in 2020 to £62.99 only a year later. As result, petrol prices have steadily increased in line with the global oil market. The sudden demand for energy post-pandemic has therefore resulted in a rise in the cost of petrol.

What are the implications of the rise in the cost of petrol?

For a small fleet of five vehicles, businesses can expect to pay at least £75 more to fill all their vehicles compared to last October. To put this into perspective, an extra £75 could have filled a whole extra vehicle’s tank last year.

Simon Williams, Spokesperson for the RAC states that “the big question now is: where will it stop and what price will petrol hit? If oil gets to $100 a barrel, we could very easily see the average price climb to 150p a litre.” Small businesses are expected to be hit the hardest by the climbing fuel prices caused by the severe disruptions the pandemic caused to the global supply chains.

The Autumn budget for 2021, has decided fuel duty will be frozen at 57.95p per litre. To summarize, this helps to take some strain off motorists as the price of oil continues to rise. However, the decision was made to not temporarily cut VAT, something that could RAC claims would have benefited drivers immediately.

Businesses are reporting that the petrol prices will result in a reduced mobile side of their business in an effort to reduce costs. Additionally, other businesses state that they will be affected by the increased courier prices as petrol prices rise. Businesses have to decide whether to cut internal costs or increase prices for their customers. As a result, this can put owners in a difficult place as increasing the costs for customers can result in the business losing them.

What measures can you take?

Firstly, there are several methods you can use to help reduce your fuel consumption. In short, not driving is unrealistic for many households and businesses who rely on vehicles for commuting and business. Check out our article on 7 ways to reduce fuel consumption without cutting out driving.

Driving behaviour is one of the most impactful methods to reduce fuel consumption by as much as 60%. Some examples are driving at the speed limit, reducing harsh braking and acceleration, and reducing vehicle idling. Additionally, bad driving habits can be hard to notice by yourself, especially if you’ve been driving for a long time. It can be difficult to ensure a high standard of driving behaviour without a vehicle telematics system.

In conclusion, it’s easy to monitor your driving behaviour with Pay as you Track’s ‘Behaviour Report’. The report gathers information from your vehicle tracking, letting you know a breakdown of harsh acceleration, braking and cornering. Pay as you Track offers the UK’s only no-contact, pay as you go GPS tracking integrated into our software charging only for the days your vehicles are on the move. With the financial constraints upon small businesses, Pay as you Track are offering multiple device discounts and a new finance solution.

Get a free online quote below:

Sources Used:

https://www.theguardian.com/business/2021/oct/14/energy-crisis-reignites-demand-for-oil-and-poses-threat-to-climate-targets-says-iea

https://www.youtube.com/watch?v=K0H1zguAUXI&t=1s

https://payasyoutrack.com/reduce-fuel-consumption/

https://www.theguardian.com/business/2021/oct/14/energy-crisis-reignites-demand-for-oil-and-poses-threat-to-climate-targets-says-iea

https://www.rac.co.uk/drive/news/motoring-news/budget-2021-what-does-it-mean-for-drivers/