But what is the answer to being in control of your Diesel Costs?
Will Diesel costs rise inexorably this year or not? Throughout most of 2020 the International Diesel Prices fell, and only turned about towards the end of the year; Why? The COVID 19 pandemic saw most Countries follow a similar pattern albeit at different times. In the UK the 1st case was identified on 1st February in York when some visitors from Wuhan Province in China were visiting for a relatives Graduation ceremony from University of York. Back then most virus specialists thought that the UK may suffer a few thousand cases and a handful of deaths. How wrong they were to be proved in the ensuing months.
The International Oil Trade is geared towards constant oil movements around the Globe, with Tankers programmed months in advance, which cannot be stopped, only diverted to other destinations. Refineries are pre-programmed to produce retail and wholesale fuels to a predicted pattern by their sales expectations. Having worked alongside a Refinery in a past job, I understand the pressure they are under to ensure that they have space to take in the cargo heading their way, and must get rid of refined oil products to make room for it. This does lead to ‘dumping’ fuels on various markets from time to time to ensure the Tanker will be able to discharge. If not... well you just don’t want to go into the cost of demurrage if you delay a Super-tanker’s schedule, far too scary!
Once COVID had got a Global grip and many governments had shut down much of their Industry, remember last year in the UK? Demand for oil fuel dropped and consequently so did prices as refiners were forced to dump refined products to make that room. New crude oil cargoes were cancelled forcing Oil Producing countries to cut prices to try to maintain their share of crude sales. It took until the end of the year for OPEC and Russia to agree a cut, then we saw prices start to rise, and they’ve not stopped yet!
2021, where will it go…… likely up. India and China have both increased demand for oil as their industries start rolling again. At some time the UK & EU industries will get back to full production and inevitably the demand for oil will steadily rise. The traders know this, so are already demanding premiums for future cargo’s.
To Gamble or not to Gamble……. Well this is the other question. Should you look to FREEZE the price of your Diesel for up to a Year or not? Is it a gamble? Well, yes it is….. But is it not an even greater gamble not to FREEZE it and be at the mercy of unregulated markets, of which you as the end user, have no control whatsoever!
Consider freezing some of your diesel usage with our unique futuresfuelcard, say 50%, then you have the best of both Worlds. If it goes up, you have protection for at least half of your needs. If it stays steady, well half your diesel is at the weekly market price so the combined cost doesn’t vary much overall. If it goes down…. Well that’s somewhat unlikely given what we’re hearing in the market.
Call futuresfuelcard on 01525 300 040 or www.futuresfuelcard.co.uk for more info, and a friendly, no obligation chat.
By Fuelcard Frank
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