Over the last few years, fuel prices have hit record highs. And it’s not just here in the UK. The sting has been felt across the globe with the cost of filling up more than ever – impacting businesses, suppliers and consumers alike.
The impact of high fuel costs on businesses
The most obvious effect on businesses is within the supply chain. The simple fact is that if transporting goods costs more, suppliers have little choice but to charge more. Businesses pick up the bill and profits drop.
Of course, some businesses may decide to pass the cost on to their consumers by increasing their own prices. This naturally comes with risk, as increased prices may lead consumers to look elsewhere.
The knock-on effect of high fuel prices may also mean that businesses have to look internally at where they can make cuts. Whether it’s redundancies, scaling back operations or closing offices.
It can be a difficult period for any company to navigate, considering operations, logistics and production costs. Making the right decisions and planning what to do next is therefore key. But first, it’s important to understand the root of the problem.
The problems with petrol stations
One issue with petrol stations historically is that their fuel prices don’t always follow the eb and flow of the general market. While the cost of some things comes down to reflect the market, there’s often a delay in fuel prices falling.
Another issue has been that fuel prices fluctuate wildly from area to area. So you might have been paying more for petrol just because you live or work in a certain place.
How fuel transparency could be the solution
Fuel transparency is a new government-backed scheme where petrol stations have to share their most up-to-date fuel prices online, aiming to make it fairer for drivers and the companies they work for.
Being able to check and compare the live petrol prices helps drivers choose where best to fill up. And if more drivers choose the stations offering cheaper fuel, other stations will be forced to respond and lower their prices.
What are the benefits of fuel transparency to businesses?
Fuel transparency puts businesses back in control of their operational costs. Knowing what their drivers are likely to expense on fuel means they can budget and plan accordingly, with lower risk of being caught out by sudden price hikes.
Having a plan in place will save businesses time as well as money, making it less likely that they’ll have to react and change their plans to accommodate higher fuel costs. Drivers can easily check the live prices on their sat navs or smartphones, making refuelling more efficient as they head straight to their chosen petrol station.
Being able to plan and factor in fuel costs in advance will put businesses in a stronger financial position – and reduces the likelihood of knock-on effects. It means businesses shouldn’t have to make the choice about raising their own prices and passing the costs on to their consumers. This in turn will build trust with consumers and could lead to increased sales and revenue.
When businesses and their operational costs are stable, it allows for innovation. With time and budget available, companies can invest in improving their own systems, exploring sustainable options and futureproofing their businesses.
Potential challenges with fuel transparency
Fuel transparency sounds great on paper. But there are potential challenges with it in reality. Questions remain about how reliable the live data from fuel providers will be. With the government unlikely to invest in monitoring the prices shared online, it’ll be left to drivers and businesses to spot and report any inconsistencies. With the pace of working life faster than ever, how many of us will be able to take the time to check?
Conclusion: light at the end of the tunnel
Fluctuating fuel prices are a challenge to any company trying to plan their time and budgets. Fuel transparency is a way to reverse the problem. The government scheme will make live petrol station prices available to drivers and businesses, making it easier to plan ahead. Questions may remain about the reliability of the live fuel price data. But as fuelGenie’s Tony Burgess says, “it’s moving in the right direction.”
You can check fuel prices around the UK on the fuelGenie Station Finder. fuelGenie customers also have access to our price widget for full transparency on savings.
