Driving – For Fun or Otherwise?


One can probably accept such a change of direction under climate change but not at such a rate of change as the direct result of bad advice being given by government. Nevertheless, the changes will come into effect, and anyone driving a diesel-powered vehicle will certainly feel the implications.

Since OPEC decided to let prices find their own level in the market, from November 2014, much of the world has enjoyed lower, almost cheap, fuel supplies. From December 2014 to November 2016, crude oil prices fell by around thirty-five percent and as a result we have enjoyed much lower petrol and diesel prices but, as we do not run our vehicles on crude oil, the impact of the price fall has only been felt on the fuel element of the price, around thirty percent of the total. Furthermore, although refined product prices – petrol & diesel – follow the crude price, there will be some variation on the supply and demand of the individual product.

As oil is traded in US dollars, the exchange rate around the world will also impact on prices paid. In the UK, since the BREXIT vote, the pound has fallen by around twenty per cent against the US dollar, and therefore it is by this amount that the price of the commodity element will have increased simply due to the currency change.

Back in December 2014, the price of Brent Crude stood at $64.24 and when expressed in sterling terms, at £40.84. Now, this week it was lower at $55.69, but in Sterling terms, higher at £45.02. As for petrol and diesel, the price of petrol is higher in the Summer months influenced to some extent by the US Driving Season while in Winter months the two are closer together.

Yet, to these individual product prices, we have to add Duty at 57.95ppl for both petrol and diesel and also on biodiesel and bioethanol and then apply VAT at 20% over the total – even Tax on the Duty! However, the only element affected by the change in the oil price is the commodity. This week, the wholesale price of Petrol was around 32ppl, and to this we have to apply storage, distribution and marketing costs, plus Duty and VAT to reach about 118ppl. The equivalent figure for diesel was 33.50ppl.

Looking way ahead now into the future, petrol and diesel vehicles will still be the main sources of transportation for both the domestic and commercial markets, in spite of additional taxation and charges, but, electric vehicles are coming. Initially, they have proved very expensive to buy with a low second hand or trade in value a short time later. There is much development taking place on batteries and certainly for those people living in big cities and only driving short distances, the electric car will be a real temptation.

Written By – John Hall

Alfa Energy Group

Alfa Energy Group, an Edison Energy company, is an international energy, sustainability and technology consultant partner with 250 employees over 3 international locations. For over 25 years, Alfa has been servicing its clients’ needs through energy and water management, sustainability, and compliance consulting, and an intuitive ecosystem of user-driven energy, water, and carbon management software platforms. With coveted awards, an international industry-wide recognition, and clever simple solutions, today Alfa is partnering with clients to establish and deliver pivotal net zero strategies. Through smart energy management, the expertise and diligence of its people, transparent processes, and data management, Alfa continues to lead through its recognised gold standard of service delivery.