Fuel price rises down to combination of factors

A host of factors have contributed to recent fuel price rises, according to suppliers.

The logistical challenge of delivering to some areas, high demand, the backlog following bad early December weather, plus crude oil price rises and exchange rates are all being cited as factors.

A big rise in demand in late November coincided with the onset of bad weather.

Under normal winter weather conditions, deliveries of heating oil are usually made up to five days after ordering, according to the Federation of Petroleum Suppliers. 

Current backlogs are around 10 days in England and Wales and up to 20 working days in some parts of Scotland.

Hull based distributor Rix Petroleum normally delivers around 500,000 litres of tractor fuel, white diesel, petrol, and kerosene for domestic heating a day but is currently receiving orders for around three times that volume.

“We are working flat out and we stopped taking new customers more than two weeks ago,” said director Duncan Lambert. “If you are a regular customer and place an order today, you would be getting your fuel in the first two weeks of January. We will have drivers working on Christmas Day and all the other bank holidays.”

Contingency plans to get supplies to customers include dropping fuel off in five gallon drums for collection from the roadside.

Red diesel prices from Rix on 22 December ranged from 57p to 65p/litre delivered depending on size of order and delivery distance, said Mr Lambert. Heating oil supplies were priced at 65p to 69p/litre again depending on order size and destination.

Several of the firm’s managers and directors also have tanker licences and so lorry running hours have been extended by this as well as by the temporary relaxation on drivers’ hours rules. With arable fieldwork quiet, the main pressure is on kerosene supplies.

For a week in early December eight of the firm’s 35 tankers could not operate because drivers could not get to work and it was impossible to reach many customers. At the same time a supply depot at Immingham was frozen in and too dangerous for lorries to enter for three days. Very low temperatures have meant that some customers have also had problems with fuel waxing.

“To date we have spent more than £3500 in recovery fees to get lorries off farm tracks,” said Mr Lambert.
 
Rix operates in an area stretching from Montrose and Grangemouth in Scotland to Norwich and across the Midlands into Shropshire. Lead time between ordering and delivery has recently been longer than three weeks but this has now been pulled back a bit because the weather has not been quite as bad as had been expected.

FPS has issued guidelines for fuel suppliers to prioritise orders on the basis of need – details are on the organisation’s website.