On 30 September the UK average price of diesel went over £2 a litre for the first time, at 200.02p according to Fuel Finder. If a van is how you earn your living, stop waiting for the Budget to sort this out and put fuel into your prices now.
Diesel is up more than a third since late February, driven by Middle East disruption to refining and shipping. The current 5p duty cut runs until 31 December, and a 3p rise is pencilled in for January. The Chancellor might extend the cut on 28 October. Even if he does, it’s a few pence against a rise of around 50p a litre since February. The Budget can’t fix this, and your margins can’t wait four weeks to find out.
In practice that means shorter validity on quotes, 30 days rather than 90, and a fuel adjustment clause on any longer contract. A sole trader using the 45p-a-mile simplified rate should know that rate doesn’t move with pump prices, and once you choose a method for a vehicle you’re stuck with it for that vehicle. That’s worth thinking about before your next van. A limited company reimbursing staff on HMRC’s advisory fuel rates will find those only update quarterly, so they lag behind the forecourt.
Some will worry customers won’t wear a price rise. They’re filling up at the same pumps. A short, honest line on a quote explaining fuel costs is easier to accept than a business that quietly runs at a loss and then folds.
When did you last update your prices for fuel, and was it before or after diesel passed £1.90?