The bulk diesel average price dropped again in April to its lowest since December 2021 according to figures collated by RHA, but feedback from within the coach industry is that private hire rates remain strong despite fuel’s ongoing downward trend.
April’s average for delivered bulk diesel was 112.80ppl excluding VAT in the trade body’s data. That is a 5.24ppl, or 4.4%, reduction from March’s 118.04ppl and puts the average down by over 16ppl from January via three consecutive drops. April’s average was also 30.99ppl, or 21.6%, lower than 12 months earlier and 42.61ppl, or 27.4%, down on the fuel crisis high of 155.41ppl in June 2022.
While the drop will be welcome across the coach industry and among bus operators that do not hedge their fuel in its entirety, one business in the former category has seen no similar impact on hire rates.
They note that other costs including wages, parts and utilities are at historic highs and that customer demand remains strong to the extent of sometimes exceeding supply. “There are not enough operators out there and we can pick and choose our jobs,” the head of the business adds.
In addition to lower diesel prices, sterling rose modestly against the US dollar in April to its strongest position in 12 months. However, RHA’s figures show that the average price of Brent rallied in April after three consecutive month-on-month drops. It sat at an average of US$83.37 per barrel, up from the US$78.67 of March.
Such a rise is in line with forecasts by the United States Energy Information Administration (USEIA) in mid-April. Via its short-term energy outlook, the Administration predicted that the average oil price in Q2 would be US$86 per barrel and remain largely constant for the remainder of the year, before falling consistently in 2024.
USEIA’s May forecast had not been published at the time of writing. However, some other sources differ slightly from the Authority’s predictions, with some banks suggesting that oil could reach US$100 per barrel by the end of 2023 and stay there into 2024.
Despite planned oil production cuts by OPEC+ nations, USEIA expects growth in other countries to “more than offset” such drops. Administrator Joe DeCarolis believes that oil production and demand for petroleum products will be “relatively balanced” in 2023.
