UK diesel prices hit a record average of 199.18p a litre on 28 September, according to the RAC. The previous high was 199.09p, in June 2022. If your business runs on vans, your fuel bill has gone up before your prices could.
01Where UK diesel prices stand
According to the RAC, petrol also rose, to an average of 174.13p a litre.
The RAC says filling an average family car with diesel now costs almost £110. That is £31 more than at the start of the conflict with Iran in February.
The RAC's head of policy said the rise will hit everyone who relies on diesel lorries and vans. He expects the extra cost to be passed on to customers.
02What does one van now cost a year?
In August we worked through the fuel bill for one van covering 20,000 miles a year at 35 miles per gallon. That is about 2,600 litres of diesel a year.
At 199.18p a litre, that van now costs about £5,170 a year to fuel. When we wrote our cost plan for van businesses, diesel was 183.4p. The same van now costs about £410 a year more.
This is an illustration, not a forecast. Put your own mileage and fleet size into the sum.
03Covering the gap until your prices catch up
Many trades priced their autumn work at lower fuel prices. The cost has risen now, but new prices only reach your income as new jobs are invoiced.
Three things are worth doing this month:
- Review your quotes: add a fuel line or a review date to any quote that runs past Christmas.
- Plan the cash gap: an overdraft or short-term working capital can cover the months before higher prices come through.
- Price the replacement van properly: if a van is due for replacement, compare its running costs as well as its price.
Asset finance can spread the cost of a more efficient van over its working life. Business growth finance can cover the wider cash-flow gap.
04Why the Budget on 28 October matters
The RAC warns that pump prices will rise by another 5p a litre by the spring if the current cut in fuel duty is fully reversed as planned. It has asked the Government to cut fuel duty or VAT further.
The Budget is on 28 October. It is worth knowing what it says about fuel duty before you fix your prices for next year.
