Alongside vehicle maintenance and repairs, fuel is one of the most significant ongoing expenses associated with operating a successful fleet. While fuel discount cards can help your drivers reduce the cost of filling up their tanks, global shifts in the oil market may allow you to unlock even greater savings.
So, what's happening in the world of fuel?
Petrol prices plummet
Fluctuations in the Chinese market have contributed towards lower fuel prices in New Zealand. Between July 5 and August 5, the Automobile Association (AA) reported that the cost of fuel fell across the board, with petrol and diesel prices dropping seven cents and 10 cents respectively.
For now, prices sit at around 204.9 cents per litre for 91 octane, 213.9 cents per litre for 95 octane and 123.9 cents per litre for diesel.
Fleet managers and everyday drivers alike are sure to enjoy the reduced cost of fuel. What's more, the AA believes that prices could drop even further in the weeks to come, thanks to a relatively stable New Zealand dollar, which is holding strong against declining commodity prices.
Why is the cost of fuel dropping?
Cheaper fuel, of course, is good news for most of us, but what exactly is driving this trend? As you might imagine, it's a complicated industry and there a number of factors at play, but essentially it comes down to an oversupply of oil.
As a nation, China is the largest energy consumer on the planet, and industry shifts within the country can have a domino effect on the rest of the world.
This has become particularly evident recently, with Time reporting that the growth of Chinese manufacturing slowed dramatically in July. As a result, the country's overall thirst for oil dropped, leaving the market flooded with a surplus supply. In turn, this drove oil prices down by 5 per cent to less than US$50 per barrel – the lowest it's been in six months.
— Money (@MONEY) August 4, 2015
Coupled with American consumer spending reaching something of a plateau in June, it's little wonder that we're seeing cheaper fuel prices at the pumps here in New Zealand.
Only time can tell whether this trend will continue, but fleet managers who keep one eye on the industry will be in a good position to take advantage of changes in the future.