The average price of delivered bulk diesel rose again in July according to figures collated by RHA, with the trade body noting that much of the increase was seen towards the end of the month.
Constraints on oil supply and a resulting impact on the price of Brent were cited by multiple sources in July, and are the reason for a second consecutive monthly rise in the average bulk diesel price. One forecaster predicted that the raw material was on track for its biggest month-on-month increase in more than a year.
According to the RHA data, the average bulk diesel rate excluding VAT reported by its members in July was 111.24ppl, up by 3.68ppl from June’s average of 107.56ppl. While the rise will not be welcomed, July’s average remained 37.20ppl below the level a year earlier.
The figures show that the Brent average in US dollars rose from $75.00 per barrel in June to $80.16 in July, although sterling again strengthened against the dollar over that period.
Although June and July’s rises in diesel prices follow a previous largely downward swing from the crisis highs of 2022, one coach operator says that there remains no sign of a softening of rates. That business – which saw its bulk diesel costs rise by 5ppl within three weeks in July – believes that a market for coach hire that remains constrained continues to upwardly influence rates, with quotes rising recently.
Among larger operators that can hedge fuel prices, volatility in the diesel market still presents a financial risk. In its strategic report released on 27 July, Centrebus noted that the price of fuel “is a key issue” for the group despite its ability to hedge.
Against the above backdrop, July saw the US Energy Information Administration (USEIA) make no change to its predictions of Brent prices for the remainder of 2023 and the duration of 2024 via the monthly Short-Term Energy Outlook report.
USEIA’s July forecast of global oil production over the same period has been fractionally pulled back with the exception of Q4 2024, however.