Fuel prices rocket in big freeze

Diesel prices have rocketed on the back of the last few weeks’ cold weather.

Just before Christmas red diesel hovered around the 45ppl mark and by the start of the new year had crept up by 3ppl. Ask your local merchant for a price today and you’re likely to be quoted something between 49ppl and 52ppl.

So what has been the main driver for these increases?

Undoubtedly the steady rise in the cost of a barrel of crude oil over the last month has had an impact on on-farm prices, however it is the continuing cold conditions that have prompted the most recent hike. 

“The freezing weather has seen demand for domestic heating oil shoot up and that inevitably brings the price of red diesel up,” said Jim Callow of Worcestershire and Herefordshire fuel supplier Callow Oils.

“Add to that the recent uncertainty over natural gas supplies and there’s a big knock-on effect.”

The inextricable links between the supply of oil, gas and other energy sources mean that fluctuations in any area of the energy market can have an effect across the board. Consequently the threats of interruptions to the gas supply over the last week have compounded the effects of the increased demand due to the cold weather.

In addition to this, ice and snow on the roads have hampered deliveries to farms and other rural businesses with up to half of Callow’s drops having to be abandoned in the last week.

Further north, Cumbrian contractor John Horsley has had to accept that levels in his red diesel tanks will drop lower than he is usually comfortable with.

“We’ve been told that we’ll have to wait at least a week for fuel deliveries whether for red diesel or heating oil,” he reports.

“We can cope with that but it’s the price hikes we’re struggling with. How can we pass on these increased costs to our customers when they’re not receiving any more for their milk?

“We’re being squeezed ever tighter and we just can’t absorb the costs any longer – something will have to give.”   

Want to know what farm inputs’ prices are doing? Take a look at the Farmers Weekly/NFU Price Monitor and submit your own figures to the survey

* What is the cost of the “big freeze”? See Phil Clarke’s Business Blog

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