Fuel prices! why so high?
CJ Express Ltd are committed to providing the best in customer service. We offer professional and friendly assistance to our customers for whatever they may need. That is why we are proud of our continued success in satisfying one customer after the other.
With this in mind and with the way that fuel prices are going up and up we thought we would share some information we received from our Fuel card suppliers.
The Fuelcard Company buys large quantities of fuel on the bulk fuel market, which we then sell to our customers. The last week has seen enormous increases in prices on this market, which has meant dramatically increased cost that we have no choice but to pass on to our clients. Since the beginning of 2008, the oil market has gone up by 25%, with an incredible 5-6 pence per litre increase each week. Everybody in the industry is subject to these rises and they unfortunately cannot be avoided. The rise can be explained in terms of the following three factors:
1. Economic Concerns - Crude oil and it derivatives, such as diesel and unleaded petrol, are traded in U.S. Dollars. The U.S. economy is currently very weak, which has meant that the value of the dollar has fallen correspondingly. When this happens, there is a rush from foreign investors to buy commodities in the U.S. dollar. This greatly increases demand, and forces up prices.
2. Supply and Demand Fears - OPEC (the Organisation of Petroleum Exporting Countries) controls about 40% of global oil supply, and is refusing to increase production in order to stabilise prices, despite direct requests from the UK and US governments to do so. Furthermore, global demand is at an all time high due to emerging giants India and China.
3. Current Affairs and Conflict - Worldwide affairs have a genuine impact on your fuel prices. This week, conflict between Turkey and oil giant Iraq and attacks on Nigerian Militants on oil pipelines have caused a major price spike as worry grows about global supply capabilities. Concerns about the U.S. housing market as well as long term uncertainty over relations between the U.S. and the Gulf States have also caused prices to rise.
The market is expected to eventually stabilise, and we will continue to provide you with the most competitive fuel sur-charge that we can.
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