Globally, the oil prices have taken a beating over the past 14 weeks. From its peak pricing that was north of $120 a barrel, oil prices have corrected by more than 60%. However, fuel pricing in UK has not corrected to an extent that we can truly experience the fuel savings.
Unleaded pricing at around 99 pence a litre across many parts of UK is a nice transition from the £1.27 levels seen earlier in 2013 and 2014. But, the fuel pricing remains higher compared to other countries. It could be a smart ploy by the Government to keep fiscal deficit in check and to ensure that the Government is better prepared to manage any hike in global oil prices in the near term.
In talking with Michael Shaw of Shaw Fuel Cards, we realized that fuel cards continue to be a preferred method of saving fuel costs for middle and large businesses. Michael tells us that major industries in UK make use of fuel cards to manage the fuel expenses. Industries such as large construction companies and the logistics’ chains have been dedicated users of the business fuel cards for quite some time now. Over and above the reduced wholesale fuel pricing, these industries focus on the VAT compliance factor too. Most fuel card suppliers offer an invoice that is compliant to UK’s VAT norms; these invoices also end up saving hassles that are usually associated with the entire VAT reclamation process.
We asked Michael to provide an insight into the future of oil prices. Michael feels that oil prices will continue to be under pressure during the first 6 months of the year. Brent crude oil may move in a range between $40-$50; later in the year the price may make an upmove that could take it back to the intermediate levels of $60 a barrel. Sometime towards the end of the year or the kick-start of 2016, we may see oil stabilise at $70-$80 levels. Michael also suggests that global factors may cause oil prices to spiral back to $80 anytime. It’s a difficult thing to predict.
In the interim, Michael does suggest making the most of lower fuel prices and enroll for business fuel cards to become a part of the Shaw fuel cards’ team. Apart from decent fuel pricing, the transparent service model has interested many UK businesses and the team at Shaw is confident that many more UK businesses will like what they got to offer for the reputed establishments.
You may check Shaw at http://shawfuelcards.com