2014 - What a Year!
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A year of record highs, record lows, turnabouts, reversed trends and hard fought battles
A damp start with the wettest winter on record kicked the year off with a hearty round of blame and counter blame about funding for flood defences. But failed to dampen enthusiasm for the UK’s driest September on record and 2014’s highest ever average global temperature. All of which set an appropriate backdrop for overheated debates about climate change and the role of fossil fuels leading up to the UN Convention for Climate Change in December and new tougher US and UK targets for CO2 emissions, slightly undermined by the agreement to allow fracking to support fuel security and shore up oil and gas reserves.
Having purchased 253 fuel stations from Rontec earlier in 2011, Shell announced the disposal of up to 250 of their branded sites around the country. Overall numbers of outlets reversed the trend of recent years and grew slightly to 8,616, up on the low of 8,590 earlier in the year, but still 2,251 down on a decade ago. The recovery, albeit modest, was led by continuing success for the supermarket sector, continuing a relative surge to 1,358, and somewhat masking the shrinkage of the oil companies and other branded sites.
Having risen to a peak in the spring of 2012 and pretty much stayed there, with Britain’s most expensive litre of diesel last year costing an eye watering £186.9ppl, supermarkets led this winter’s price war, enabled by the plummeting oil price, cutting consumer prices initially through loyalty backed schemes and later by passing on some margin savings into the retail pump price. Judging by our customer survey, which suggested most customers expected fuel prices to continue to rise into 2015, very few predicted the sharp falls in the run up to the year end. All of which has contributed to CPI inflation falling to its lowest ever level, causing consternation for the government and the BoE for very different reasons.
This is news also unlikely to be welcomed by those vehicle manufacturers leading the way on alternative fuel and green technology. The choice to invest in hybrid or entirely alternative fuel-powered vehicles is often hard to justify on purely cost grounds and is inevitably powered in part at least by lifestyle choices. That said, the growth in popularity of alternatively-fuelled vehicles, the launch of compelling ground up production electric vehicles such as BMW’s i3 and i8, and the increasing installation of EV charge points around the UK were bound to have been motivated in part at least by the apparently unlimited increase in fuel price through most of last year. And the clear message from HMRC that the smarter vehicle tax choice is a low-emissions choice.
All of which may have served to distract us from the apparent ditching of the erstwhile ‘diesel is best’ mantra chanted by the government and enviro-lobby in earlier times. This guidance is now being turned on its head amid fears about the previously unseen (or ignored) effects of particulates on the environment, leaving some vehicle professionals feeling misled by previous injunctions to ditch petrol and switch to diesel as a greener choice and stung by the more recent duty-fuelled diesel price disadvantage.
So what will this year hold? Will pump prices continue to fall on increasing price competition and reduced global oil demand? Will hybrids, EVs and gas vehicles start to take off, or remain the preserve of the environmentalist minority? Will still-healthy price spreads encourage more forecourts to open, or is the long-term decline set to return?