Fleets warned not to be “complacent” about falling fuel prices

US tariffs and geopolitical tensions are impacting pump prices, with fleets being warned the volatility in oil prices is set to continue.  

Brent crude has been in a strong downtrend over the past few months, declining from the year-to-date high of $82.42 to its current level of around $66 dollars.

With analysts forecasting a slowdown in global economies and a possible recession in some markets, demand could fall when OPEC+ members have just voted to increase their oil production in their last meeting.  

Historically, crude oil demand often falls during a recession, which coupled with increasing volumes could bring a further decline in wholesale prices and, in turn, pump prices.  

“Fuel prices coming down is good news and hopefully everyone’s going to see some benefit, but it’s really important nobody gets complacent, because this could change very quickly when major oil producing countries start reducing production,” said Paul Holland, managing director for UK/ANZ Fleet at Corpay, including UK brands, Allstar, Keyfuels and The Fuelcard Company.

“All of a sudden, we could find ourselves in a very different trend, which could be materially impacting people’s costs imminently.”

Falling petrol prices drove UK inflation down by more than expected in the year to March.

Inflation was 2.6%, down from a rate of 2.8% in February, according to the Office for National Statistics (ONS).

At the end of March, the average price of a litre of unleaded stood at 136.03p – nearly 4p down (3.6p) on the cost at the start of the month (139.62p), and a price last seen in late November 2024, according to the RAC.  

The average cost of a litre of diesel, meanwhile, fell just as sharply, down 4p in March from 146.46p to 142.51p, its lowest since early December 2024. 

As one of the biggest commercial buyers of fuel in the UK, Holland says that the business helps fleets to be more efficient, whether in terms of how they buy fuel, where they buy fuel and what type of fuel they buy.

But he warned: “I’d say to our customers, to anybody operating fleets, that trade wars are going to affect their operating costs in a very dynamic way.”

“It is exceptionally volatile, and sometimes it's quite difficult for fleet operators and members of the public even to understand the dynamics,” he added. 

“British businesses have proved themselves to be innovative, resilient, agile,” Paul Holland, Corpay

Since returning to the White House in January, US President Donald Trump has imposed taxes of up to 145% on imports from China, with other countries facing a blanket US tariff of 10% until July.

His administration said last week that when the new tariffs are added on to existing ones, the levies on some Chinese goods could reach 245%.

China has hit back with a 125% tax on products from the US

In the UK, Trump has confirmed that new import taxes of 25% on cars and car parts entering the US will apply to the UK, with a 10% blanket tariff also applied to all US imports from the UK.

Fleets have faced ‘multiple challenges’

Holland highlights a challenging economic backdrop over the past five years, with Covid, the war in Ukraine and tariffs now impacting world trade.  

“British businesses have proved themselves to be innovative, resilient, agile, and I think as a whole, the industries that we operate in are responding very well to the to the challenges that we see,” he said.

Holland praised Government support for low benefit-in-kind (BIK) tax rates for electric vehicles (EVs) to help fleets make the switch, but criticised a lack of clarity around the phase out dates for internal combustion engine (ICE) cars and vans, which the Government finally confirmed this month (April).  

While also welcoming Government support, such as the 12-month extension to the plug-in van grant, he said: “If the Government is serious about driving businesses and supporting businesses to transition (to zero-emission vehicles), particularly van fleets, it needs longer term initiatives. 

“With longer term initiatives, businesses will commit, they will then drive manufacturers to invest more in technology, and we’ll end up with a much faster acceleration into what would be a more sustainable long-term position.”

He added: “I really do think as a nation, we've made great progress, but the problem is we've stalled, and we need to understand why we've stalled.”

To help fleets navigate the challenges they face, Holland says they are always looking to innovate. 

He explained: “We’re constantly at the sharp end talking to customers and then we have quite a robust innovation and product team that sits behind it that translates that into areas where we can add value.”

With three quarters of the top 200 biggest fleets among its customer base, alongside small and medium-sized enterprises (SMEs), Holland emphasises the importance of those larger operators.

“We should always look to the big fleet operators to help us lead the way on innovation, because they've got the scale and the application to be able to test and learn and to be able to drive the market in that way,” he said. 

“It is then the job of all industry stakeholders to try and make that technology, that learning, as applicable as we can through to the very smallest operators in the marketplace.”