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Tristan Young asks the fleet industry what might happen if the relentless fuel prices rises continue
Three years ago a New York oil analyst at investment bank Goldman Sachs predicted the price of a crude oil would pass the $100 a barrel mark. He was ridiculed for his comments.
Last week Goldman Sachs' Arjun Murti predicted that in two years oil could hit $200 a barrel.
This time round, it's a forecast no one's laughing at.
If the price of oil, and therefore fuel, does almost double in the next two years, what would your business do? And how would this impact on the running of a business car fleet?
BusinessCar asked a broad spectrum of fleet professionals to give us their thoughts. Here's what they said.
"If fuel does go up to £2 per litre many businesses will find they have massive costs to cover, which they probably hadn't anticipated.
"At that figure, businesses will be forced to rethink their travel arrangements for business meetings and review their fleets to ensure their vehicles are as efficient as possible.
"If you are driving 25,000 miles per year it could mean an increase on your annual fuel bill of more than £2500 for each vehicle. With a fleet of 10 cars that's more than £25,000, and with 200 cars it's closer to £500,000.
"These are substantial costs which will require urgent action.
"It is likely to mean that many people will stop driving to face-to-face meetings that are not entirely necessary and instead turn to other technology in order to continue to hold meetings more efficiently.
"At Pendragon Contracts, we have started holding video conference meetings and the cost of fuel is one of the main reasons behind that. With bases in Sunderland and Derby, and customers across the UK, we have a lot of long distance meetings and, when you add accomodation to the bill, they can be an expensive way of communicating.
"To counter this, we have invested in video conference facilities and we have found it very beneficial. I would expect more companies to invest in similar technology as an effective means of reducing costs.
"You may also find that companies ask employees to travel by public transport, and that they get more strict when it comes to recording personal mileage and business use.
"It further reinforces the need for businesses to consider the whole-life costs of vehicles, which will increase significantly, and that they appreciate the impact a price rise on fuel of this magnitude would have."
"Back in April 2007 the average price per litre of diesel was 95p with £1 on the horizon. Today we are paying 120p per litre and the prospect of £2pl is now regarded as a possibility.
"Despite this, fuel cost is often disregarded when looking at the whole-life cost footprint of vehicles. Instead, discount, depreciation and SMR costs are the first considerations. (I would of course exclude the larger, professionally operated car and LCV fleets in this.)
"Even if you take one of the most frugal lower medium cars on the market with one of the lowest CO2 emissions, and one of the best in terms of total cost of ownership - the Megane Expression dCi 86 with urban 64.2 mpg - the impact of rising fuel costs is massive.
"In 2005, the cost of fuel over 60,000 miles would have been £4023, representing 20% of the total whole-life cost. Today the figure is £5098, 26% of the total, and if prices rise to £2 per litre the cost would be £8496, representing 37% of the total cost; staggering enough, however, the cost of fuel for the equivalent petrol version at £2 per litre would be £13,336, representing 47% of the total cost of ownership.
"Inevitably, fuel cost must become a major consideration for business users, leading to downsizing and more diesels particularly in smaller cars.
"Policy makers owe it their company accountants to ensure they make decisions linked to fuel-efficient cars and vans, and in the latter case, it will only be a matter of time before manufacturers publish fuel consumption figures for their commercial vehicle ranges."
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