Maritime rules could increase cost of filling diesel cars
21 September 2018
Author: Sean Keywood
Fleets could face increased diesel prices next year, according to fuel management company TMC.
The firm says that new international rules mandating ultra-low sulphur fuel in merchant shipping could result in insufficient worldwide diesel refining capacity, driving prices higher.
TMC says this would not be the first time that reducing sulphur has caused higher diesel prices, with the gap between diesel and petrol widening to 10p - the highest yet seen - in 2008 after the US mandated ultra-low sulphur diesel for road users.
TMC managing director Paul Hollick said: "The new fuel standard set by the International Maritime Organisation comes into effect on 1 January 2020 but we expect road users will feel knock-on effects on fuel prices sooner than that. "Refineries need to invest heavily in new plants to upgrade the residual fuel oil they currently sell to shipping. That will take several years to complete.
"In the meantime many more end users will be chasing whatever low-sulphur distillate is available."
Hollick said oil industry analysts also expect oil prices as a whole to rise during 2019 as less complex refineries scramble to secure additional supplies of low-sulphur light sweet crude oil for their existing processes.
He added: "Given the scale of the factors driving fuel prices, it is understandable that fleet operators may feel somewhat helpless when they hear of another, potentially significant, cost increase on the horizon.
"But fleets can do much to mitigate the impact by aiming to achieve a clear understanding of their own cost drivers, and then applying appropriate tools and policies in their management of fuel, drivers and vehicles."