BUSINESS mobility specialist Alphabet is warning business car managers not to plan on fuel prices staying down for the long term.
Tumbling oil prices have pumped around £10.7 million-worth of savings into the fuel budgets of Alphabet customers and their drivers in the UK since last September.
Indeed the cost of refuelling the 122,500 cars in Alphabet’s combined vehicle portfolio has fallen by up to £750,000 a week and at the end of January 2015, Alphabet calculated its vehicles were using £4.3 million of petrol and diesel a week, compared to £5.0 million in September 2014 and nearly £5.5 million a week in 2013.
Non-OPEC oil producers are already cutting jobs and capital expenditure deeply, which will feed through as reduced supply later this year
However, Mark Gibson, Alphabet’s head of marketing and business development, believes oil prices will only go one way in the long-term.
“Non-OPEC oil producers are already cutting jobs and capital expenditure deeply, which will feed through as reduced supply later this year,” he explained.
“And once the current excess inventory is used up, the oil price is expected to climb again as demand exceeds supply, followed by an increase in the cost of diesel and petrol.”
“The big picture to keep in mind when developing the plans for the future of your vehicle fleet is that the worldwide number of vehicles has increased by 35% since 2005, while the supply of petroleum fuel has only risen by 12%. Therefore basic economics suggests that the periods when fuel prices reduce in future will be the exception, rather than the rule,” he added.
“Which is why, Alphabet is leading the way in assisting our customers to plan ahead to meet their current and future mobility requirements.
“This could be through smarter funding options and more efficient fleet management, as well as through more advanced mobility solutions, such as AlphaElectric which helps customers incorporate both internal combustion engine cars and electric vehicles where appropriate or innovative approaches to corporate carsharing, such as our AlphaCity solution.”
Why there will be a fuel price rise
- Non-OPEC oil producers cutting jobs
- Cuts in capital investment by oil producers
- Once excess inventory used up, prices will rise
- Increase in cars on the road not matched by increased oil production
What you need to do to counteract the fuel price rise
- Consider alternatives for your small business
- How would hybrid and plug-in hybrid vehicles fit into your SME company car set up?
- Could you make more effective use of electric cars in your small business?
- Have you considered reduced company car dependency through initiatives such as car sharing?
- Don’t wait: start investigating a different fuel mix for your company cars now – before the fuel price rise starts
