Mike Baker Clydesdale (IOC Heads of industry speaker) reports the numbers exclusively for IOC...
Since the start of 2014, the industry benchmark for wholesale diesel prices, ULSD10, fell from around 50p per litre and hit a low point 12 months ago in January 2015 of around 26p. The price soon recovered to around 35p at the start of summer 2015, before falling by over half to a new low of around just 15p per litre in January 2016 due to ongoing concerns about oversupply and a gloomy start to the year in terms of global economic confidence.
These fuel price decreases have been so significant that there has been speculation that the Chancellor may look to cash in by increasing fuel duty to above the current rate of 57.95p per litre. Whether this will eventuate given that motorists have only recently started paying less than a pound per litre on supermarket forecourts remains to be seen.
However, since the Wednesday 20th January spot ULSD10 has spiked back up by over 20% from its previous base, leading commentators to question whether the market has finally bottomed as global producers look to make steps to work together in an unprecedented fashion to address oversupply which would quickly push the market back to a more sustainable equilibrium.
Mike Baker from the Treasury Solutions team at Clydesdale Bank has reported of a number of new SME customers with consumption of 50,000+ litres per month using Average Rate Diesel Swaps for the first time in order to help them budget with certainty and protect their businesses from fuel price spikes in 2016 and beyond. For further information email This email address is being protected from spambots. You need JavaScript enabled to view it.
