We have recently been looking at how lower company car fuel costs are helping businesses and thought we would put together a blog on the subject.
Who remembers the fuel strike back in 2000? 15 years ago…we remember it like it was yesterday! It had a massive impact on company car drivers and individuals alike. And it was all down to the increased cost of fuel…which has continued to rise over the years.
Until now…we’re sure you’ve noticed that fuel prices have decreased significantly over the last few months. For businesses with company cars this news is very much welcomed as it will have a positive impact. We’re sure that all the Finance Director’s out there will be happy that their company car fuel costs have decreased.
The price of Brent crude oil fell to its lowest level in six years and the UK’s biggest four supermarkets have all cut their fuel prices again. The average price of petrol in the UK has dropped to around £1.03 a litre and diesel is now below £1.10 a litre depending on where you fill up your company car.
Why The Decrease?
Well there are a number of contributing factors including:
Oil production levels remain high
US shale oil and to a lesser extent Libyan oil returning to the market which has pushed up supply
A slowdown in the Chinese and EU economies has reduced demand
A strong US dollar making oil more expensive in real terms, pushing demand even lower, resulting in plummeting oil prices
How Low Could Fuel Prices Go & Will They Stay Low?
BBC Five Live gathered viewpoints on the subject and the lowest prediction was 85p a litre.
Bob Dudley, group chief executive of BP, has suggested prices could remain low for perhaps the next three years.
But we all know that there is a General Election looming so it’s anyone’s guess as to what will or won’t happen in regards to the duty.
What Does All This Mean To Businesses With Company Cars?
In simple terms it’s a great cost saving that won’t of been budgeted for in the company car fuel cost figures.
According to Business Car Manager The falling prices presents businesses with an unexpected but very welcome cut in the cost of running their vehicles, on average around 14% off the weekly fuel bill, based on the reduction of the price of a litre of diesel between October 2014, 133p, and the start of January 2015, 114p.
The message to businesses should be to look at making the best of the current cost savings on company car fuel costs, and try to re-invest the proceeds for future growth. For more ways to save money on your company car costs give us a call on 0113 2512051.