Fuel Price Pulse – 10th April

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We share our insights into the factors impacting fuel prices, including predictions for fuel costs as we head into next week.

What determines fuel prices?

Wholesale fuel prices determine the price of petrol and diesel at the pump. They are influenced by a range of factors, including crude oil supply, demand, and pricing, oil refinery production levels, the pound-to-dollar exchange rate, socio-economic and political factors that might impact production/demand, the margin (profit) taken by fuel retailers, and fuel duty and VAT charged by the Government.

 

Fuel prices this week:

Oil prices fell dramatically this week due to ongoing fears that Donald Trump’s latest tariffs could spark a global recession. There is speculation that this could mean cheaper fuel for drivers, with commentary from the RAC saying that fuel prices could fall to their lowest level since 2021.

US Tariffs

The sharp drop in oil is mainly due to concerns that the tariffs will slow down the global economy, reducing demand for fuel. On Wednesday, oil prices hit a new four-year low after China struck back at the U.S. by announcing much higher tariffs on American goods. China’s finance ministry hit back saying it would raise tariffs from 34% to 84% in response to President Trump’s decision to enforce a 104% tariff on Chinese imports earlier this week.

Supply and demand

Supply and demand issues also impacted pricing this week. In response to the tariff situation, Saudi Arabia, the world’s largest oil exporter, lowered its prices for Asian buyers to stay competitive. On Tuesday, the 2,700-mile Keystone oil pipeline ruptured. Canadian regulators say the pipeline transports more than 26 million gallons per day on average, so any downtime halts the flow of millions of gallons of crude oil from Canada to refineries in the U.S. – potentially leading to higher prices.

The pricing outlook for next week

All of these factors are pushing oil prices downwards. When crude oil prices fall, it usually leads to lower prices at the pump – although changes may not be immediate. With global markets shaken and uncertainty around the economic impact of the US tariffs, experts say price swings could continue in the weeks ahead.

 

Other factors that influence oil and fuel pricing:

  • While geopolitical tensions can cause market uncertainty – especially in oil-producing regions such as the Middle East and Russia – global economic performance can slow demand and impact prices. 
  • Oil is traded in U.S. dollars, so dollar fluctuations impact oil prices. A stronger dollar and fluctuations in exchange rates make oil more expensive in other countries, potentially lowering demand. 
  • Seasonal factors like winter heating demand in the Northern Hemisphere can also increase oil consumption and pricing. 

Please speak to our team for more information on fuel card pricing, including advice on how to save time and money on fuel management. 

 

The information provided in this post is for information only. It does not constitute financial advice. Pricing predictions are speculative and should not be relied upon for forecasting.