Coach operators may have little choice than to seek a fuel surcharge from some customers if elevated diesel costs linger against a backdrop of conflict in the Middle East, one such business has suggested.
Oil prices have fallen back after peaking at over US$117 per barrel for Brent crude on 9 March following strikes on Iran, but they remain well above the level seen in February. No clarity surrounds when the war could end in spite of claims that a breakthrough is imminent.
The operator in question has been quoted as much as 156ppl plus VAT for bulk diesel, although much lower prices were concurrently available from other suppliers. As of Monday 9 March, using fuel cards was cheaper than purchasing bulk diesel, the firm says.
Following Russia’s invasion of Ukraine in 2022, the highest paid by the North West England business was 155.9ppl. Its head has not yet approached clients with bad news on fuel, but should high prices stick despite hints that the conflict in Iran may recede, “we will have no choice, like we did when Russia invaded Ukraine,” they say.
Meanwhile, the importance of water-tight terms of business for coach operators to counter unpredictable fuel costs has been underlined by Proximity Coach Travel Director Matt Hanson.
Noting that elevated prices for diesel may remain for some time depending on matters in the Middle East, he says that a term always included by Proximity is that any quotation is made with regard to operating costs at the time the figure is generated.
If more than seven days elapse between then and delivery of the service, the supplier reserves the right to pass on “any increase in the cost of fuel or any other increased costs to the hirer.”
Mr Hanson adds that Proximity is now taking a rigid approach to its three-day quote validity period. As a result, bookers are seeking to ensure they get the best value. While there is no hint of ‘panic buying’ among hirers, schools in particular are locking in prices quickly, and conversion rates have risen.
Meanwhile, RHA has called on Chancellor Rachel Reeves to introduce an immediate 5ppl cut to fuel duty and reverse the planned start of removal of an earlier temporary 5ppl cut that is due from September.
The trade body also wants the government to strengthen the UK’s energy security and oil refining capacity, and take further action against late payers through the introduction of standard 30-day terms.
