Petrol prices
Whether it’s to fuel the company fleet or just a single van, petrol prices can be a big dent in the company finances. By current figures, the number of cars around the world will double by 2040, and this will affect the prices we see in the forecourts.
Let’s look first at the prices of the year just gone: in 2018, the average price of a litre of petrol was around £1.21 in the UK. 10 years ago, the average cost of a litre of petrol was just £0.89. Of course, this price surge is reflective of inflation throughout history, but it does show just how much petrol prices can change. So, what can we predict for the rest of 2019? We’re joined by provider of servicing offers for many automobiles, Lookers Group, to explore the matter further.
The protest against fuel prices
2019 started out with a yellow vest protest in France, as many are aware. The grievances were sparked by the current French president Emmanuel Macron, as his government introduced a series of taxes which hit petrol with a stark price increase. Paris was engulfed by the initial outcry of dismay, with public areas being set alight by demonstrators. The protestors eventually weighed in on the government, as the carbon taxes have been scrapped because of the ‘gilets jaunes’ activism (yellow vests), with blockades, violence and even fatalities symbolising the dismay over rising fuel costs.
In France, the average price for a litre of petrol is £1.26, and the proposed taxes would have seen this increase by £0.091 per litre. The taxes were designed to support Macron’s environmental reforms, and to bring about a reduction of carbon emissions produced by French motorists. The eco-friendly stance aligns with attitudes reflected in laws established by the European Union to target carbon dioxide emissions in the automotive industry. As of 2020, fines will be enforced for manufacturers who fail to meet emission standards, and this could provoke more leaders to follow in the footsteps of Macron by enforcing taxes on petrol to curb consumption.
Looking to the future
With the wavering forecast for fuel prices, businesses will have to be careful when budgeting their fuel costs for the rest of the year. That is, of course, unless your business is in Venezuela; as one of the largest exporters of oil, Venezuelan motorists pay an inconceivable average £0.01 for a litre of fuel, and the country is paralysed by an inflation rate of one million per cent. The rule of thumb for petrol prices in poorer and export countries was maintained for the most part last year, as exporter countries pay notably less for fuel than those who receive it.
Prices are likely to continue to rise in the UK throughout 2019. In Australia, prices at the pump have reached their highest level in four months, after creeping upwards in the final quarter last year. Similar trends are evident as prices have already rocketed in Greece, Iceland, Denmark, and Hong Kong. In Zimbabwe, protests were sparked earlier this year as prices reached an equivalent of £2.55 per litre, an increase which the countries President Emmerson Mnangagwa put down to illegal trading and increased demand.
Unpredictable in nature
Accurately predicting fuel prices tricky business. Whether or not these figures will determine the rest of this year is dependent on the unpredictable nature of oil prices, with the potential for both increase and decrease from a variety of sources such as slowed growth, emerging currencies, and financial volatility.
Already, Europe is experiencing a darker tone in regards to fuel prices. In the UK, fuel prices have been the subject of sporadic protests over the past two decades, perhaps most notable in the 2012 fuel crisis. As Brexit unfolds, there is an overarching sense of uncertainty towards the country’s finances, and a potential for repercussions to be felt throughout European markets, all of which could impact the price paid at the pump as 2019 progresses.
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