April 6, 2022
The logistics sector has gone through some tough times over the last couple of years, including a global pandemic and both driver and fuel shortages. Unfortunately, these difficult circumstances see an addition in 2022 of fuel prices rising amongst other increases in costs.
The Increase in Fuel Prices in UK
What Are the Rising Costs?
According to the government website, the UK average Diesel prices for March 2022 were 170.49p per litre. Compare this to March last year, where the average price was 128.12p, it is an overall percentage difference just over 33%.
These significant increases make a huge difference to a large fleet of HGVs. The cost of filling up just 1 lorry went up by £148/day in one week last month and even just a 1p rise on a litre of fuel adds nearly £14,400 onto the annual bill.
Sadly, the predictions are that these prices could rise even more, but why?
Why Are There Rising Fuel Prices?
In short, the Russian invasion of Ukraine has had a substantial effect on the supply chain. As the world’s largest exporter of natural gas, Russia is also among the top suppliers of crude oil and supplies about a third of Europe’s demands.
Due to the war, there are fears that the oil sector will be targeted by sanctions and there will be a reduction in Russian supplies. There was already a shortage of some items due to the pandemic and so, this could continue and expand into other areas if these restrictions come into play.
How Can the Logistics Sector Respond?
The possibility of sanctions and a ban on purchasing Russian oil has pressured Europe to find alternative supplies whilst avoiding Russia cutting the country off from supply altogether. A complete Russian oil embargo could potentially have a major impact on the global economy and the logistics sector as a whole.
All hope is not lost though as we have seen over the last couple of years the resilience of the industry. While recovery would be varied across the board, at Cross Country Carriers, we are proud to be part of this community that are continually supportive of each other and will help each other through any difficulty.
We always make sure we keep up to date with industry news, so we are reactive and prepared for any unforeseen circumstance. Contact us today if you have any questions.