Are diesel prices finally returning to normal?
You don’t have to be a professional economist to recognise that the fuel markets have been… shall we say a little rocky, over the past few years. Last summer was particularly painful for drivers and fleet operators, with diesel prices at a record high (despite the wholesale cost of oil falling).
Thankfully, this year we finally seem to be seeing a break in that pattern, which may come as a relief if you’re worried about high prices having a potential knock-on effect of increased fuel theft. So the question you may well be asking now is: are diesel prices finally returning to normal?
What’s happening?
The crux of it is that diesel prices saw their biggest ever drop recorded in May, according to the RAC Fuel Watch. Fuel prices fell by 12p per litre, a drop that the RAC says is unprecedented in its 23 years of tracking fuel prices.
Specifically, that’s meant a decrease in diesel prices from 158.91 to 146.99p. To put that into perspective, this means that filling up a standard 55-litre family car has just become cheaper by about £6.50 – with fuel savings a magnitude larger for HGVs and other large vehicles.
This makes it the seventh month in declining fuel prices – the current diesel price is 52p lower than the record high of 199p per litre last summer, which equates to a £28.60 per tank.
Diesel prices are falling – but not as quickly as they should be
Fuel prices first saw a notable rise back in early 2022, partially driven by the Russian invasion of Ukraine. So while one month of falling diesel prices might be an anomaly, seven consecutive months is pretty hard to argue with – that’s certainly a pattern being established.
However, while diesel prices are indeed falling, the RAC is a bit sceptical of the reasons why. It’s firmly of the opinion that this reduction is long overdue for drivers, and crucially, not as substantial as it should be. This suggests the likelihood of “rocket and feather” pricing, which we explained in a previous post. (Essentially, it’s the term used to refer to when retailers are very quick to raise prices in line with market conditions, but very slow to lower them again when these conditions become more favourable, so it takes longer for consumers to feel the benefit.)
As an RAC spokesman pointed out, the RAC called for big pump price cuts for weeks, and they’re relieved to finally see it happen. But they don’t think it’s a coincidence that it seemed to occur right around the Competition and Market Authority’s mid-month announcement about weakening competition in fuel retailing. Similarly, they find it “galling” that over in Northern Ireland, people are paying 8.5p less per litre for fuel – raising questions about the justifications behind the current high prices in the rest of the UK.
However, the good news is that the RAC is still confident that the price reductions will continue, and its hopes are right now that the market is heading to an average diesel prices of 137p – not that far off what people are paying in Ireland. (Also notable for the fact that it’s a price the UK’s not seen since September 2021.)
So it’s all looking like pretty good news for now – we’ll keep you updated if there are any major new developments! But even if the worst of the pressure is off for now, the cost-of-living crisis means that fuel theft is still a possibility for your fleet – so if you want to protect your vehicles, you’re in exactly the right place.
First and foremost amongst reliable range of fuel protection devices is TankSafe Optimum – an anti-siphon device which we’ve specifically designed to provide 100% protection, so you can have peace of mind against fuel spills, overfilling, and skimming. You can find out more on its dedicated page on our website, or find out answers to some of the most common questions over on our FAQs page. If you’ve still got queries, our experts will be happy to resolve them - fee free to give us a quick call on 01253 400 401, and we’ll be happy to help however we can!