Fuel price review – May 2023

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Fuel price review – May 2023

The sun has got his hat on, hip hip hooray! The sun has got his hat but there’s no cheap fuel today (unless you go to Huddersfield…. read on).

The macroeconomic impact on fuel

The daily opening value for Brent Crude averaged $76 in May. That’s the lowest value to date this year and a massive 32% lower compared to May last year. The drop in the past month has largely been due to reports of weakening demand, particularly from China as well as Markets becoming more cautious as central banks across the world look to increase interest rates. OPEC+ members are taking steps to reduce output to at least flatten the reducing price. Although the decrease will maybe help Saudi Arabia take a step closer to achieving its 2030 vision.

The Exchange rate is also working in the UK’s favour.  The monthly average puts the pound at 1.25 against the dollar, the highest this year and back in line with the levels we saw last May. This is good news for the UK as it ultimately helps keep the cost of raw materials down.

What’s happening at the pump?

Pump prices are slowly decreasing (yay!).  The average price of diesel across the UK on 26th May was 148p per litre according to the RAC. However, for those travelling across the country and relying on low pump prices, it’s worth considering where you top up. Filling up at Morrisons in Huddersfield will cost you a bargain 138p a litre for diesel (price correct as of 26/05/2023).

Despite the huge variations in price across the country, the overall downward trend is good news.  However, in comparison with the Platts price the decrease is a drop in the ocean.  Compared with January, Platts has fallen 22.3p v an average pump price drop of 13.2.  It seems consumers are still very much missing out on some savings.

What will happen over the next few months?

Over the past two weeks, the Platts price has remained steady.  There’s not quite enough data to create a flat trend but this does suggest that the decreases may be ending which will directly impact fuel card users who will see their fixed price start to level out. 

Consumers paying pump prices will hopefully see those prices continue to fall over the next few weeks as the spread between Platts and retail reduces back to the levels we saw prior to the outbreak of the war in Ukraine.

Graph showing average diesel pump price