The fuel industry has seen a lot of changes throughout 2023 with the impact felt across the world of business, particularly those operating their own fleet of vehicles.
The cost of living crisis has spiralled the price rises across energy, food and of course, fuel. The wars in Ukraine and Gaza have impacted the supply and export of several global resources including petrol and diesel, pushing prices up further. There have also been environmental concerns relating to oil and fossil fuels, which have prompted a government push towards electric vehicles and regulatory shifts.
Let’s take a closer look at some of these changes and their impact on the fuel industry in 2023.
The big energy transition towards EVs
This year, big steps were made towards establishing electric vehicles as a viable alternative to petrol and diesel. This transition in energy has clearly had an effect on the fuel industry, as some industries and businesses start to shift away from traditional fuel sources towards cleaner energy like electric.
Some oil and gas companies have moved into new areas to transition themselves, acquiring businesses that specialise in electricity distribution, electric vehicle charging and batteries – and even helping with research and development of greener fuel. Companies like Exelon Corporation, Duke Energy Corporation and Pacific Gas And Electric Company are considered big players in the global energy transition.
Ever-rising fuel costs
The energy transition is one aspect that has led to rising fuel costs throughout 2023. But that’s just part of the story.
Prices climbed for four consecutive months between and July and October, with diesel reaching £1.60 per litre. Many put it down to the global price of oil, others cite the ongoing conflicts in Ukraine and Gaza.
What’s clear is that there’s huge uncertainty around fuel costs. This has impacted businesses throughout 2023 and looks set to continue into next year, with business leaders and fleet managers unable to plan their budgets as well as they would like.
New government regulations
2023 also saw several efforts from the UK government to move the fuel industry in a cleaner, greener and more transparent direction.
One move was to force fuel retailers to publish their live fuel price information, to help drivers make more informed decisions on where they could buy the best-value fuel nearby. It’s a great idea that would give fleet managers more control, but so far it has been slow to come in across all fuel providers. An RAC fuel spokesperson said: “While many have voluntarily started to publish their prices ahead of being mandated to in law, we still have a situation where wholesale price changes aren’t being fairly reflected on the forecourt."
The Prime Minister also announced that the plan to ban the production of new petrol and diesel cars has been pushed back from 2030 to 2035. This has had a clear impact on vehicle manufacturers, who had already begun investing in electric vehicles but may now have to delay their own plans.
Lastly, the Chancellor of the Exchequer took the decision to extend the fuel duty freeze to March 2024. For many businesses this was a welcome announcement, but some were hoping that fuel duty might in fact go down to help offset the rise in fuel prices.
Emerging energy trends
This year saw some interesting stats and trends emerge from the fuel industry. According to a government report:
- Primary energy consumption in the UK on a fuel input basis fell by 6.3%, with higher energy and other prices a key factor in reduced consumption levels.
- Indigenous energy production fell by 10%, due to falls in all fuels except bioenergy and solar.
- Electricity generation by Major Power Producers down 22%, with coal down 47%, gas down 26%, nuclear down 22% and renewables down 15%.
- Gas provided 43.9% of electricity generation by Major Power Producers, with renewables at 35.8%, nuclear at 19.0% and coal at 0.5%.
- Low carbon share of electricity generation by Major Power Producers up 2.7 percentage points at 54.8%, whilst fossil fuel share down 2.8 percentage points at 44.6%.
That’s a wrap
2023 has been an action-packed year for all things fuel. From the energy transition to rising fuel costs to new government regulations, there’s a lot to reflect on going into 2024. You can stay up-to-date with the dynamic landscape by looking out for more fuelGenie newsletters.