The cost of petroleum-related products, particularly diesel and gasoline, significantly impacts corporate and consumer behaviour in every developed nation and many developing ones.
As the Ukraine-Russia war drags on, there appears to be no relief in sight. If the hostilities were to end soon, it’s still possible that low production across the petrol industry could work to keep pump prices high for at least another full year.
Responses to concentrated price inflation in the oil industry are varied. Amid a global supply-chain crisis, even when know the importance of outsourcing, transportation companies are struggling to keep overall operating costs as low as possible to at least temporarily offset higher fuel expenses. Larger firms are incorporating telematics solutions into their already sophisticated computerized fleet systems.
On the retail consumer front, the cost to fill a tank with gasoline is higher than it has been in more than two decades. Vehicle owners are getting little relief from temporary discounts offered by some sellers. Plus, individuals are striving to reduce daily driving hours in an attempt to save money at the pump.
Since the beginning of the year, sales of electric and hybrid-electric cars have begun to ramp up, with some dealerships in Europe, the Mideast, and North America reporting increasing demand. Telematics, the integration of IT concepts and components into telecommunications systems, is one of the primary tools used by vehicle fleet managers to contain rising operational costs. Largely due to an ever-growing reach of the internet and various communications hubs around the world, transport firms are able to rely on telematics-based programs to relay data between on-the-road vehicles and home base control centers.
Combining careful fuel use with vehicle telematics systems, fleet owners have been able to focus their management efforts on cutting costs and increasing efficiency. If the price of diesel continues to go up for several more months, the entire transport industry will need to find additional approaches for maintaining profitable operations. After Russia invaded Ukraine in February of 2022, the supply side of the petroleum market underwent an almost immediate shrinkage.
That led to a fast upward change in both retail and wholesale prices of crude oil all over the world. With the exception of producer nations, virtually every country has struggled with the immediate results of the war. On a non-military front, the year-old logistics crisis is still wreaking havoc on international supply routes and deliveries of a wide range of goods.
Even at the cheapest petrol stations, car owners have endured an almost constant increase in the retail cost of gasoline at the pump. The effects have been more intense in some nations than others, but the overall effect is a worldwide ramping up of demand across the energy sector. The inflationary cycle is particularly apparent in markets that rely directly on petroleum or natural gas.
As consumers reduce their driving frequency by taking public transportation and combining personal trips, they’re getting some relief from the financial effects of the war and a lower oil supply. If the situation worsens, there could be a widespread return to public transport and less personal driving. Several of the world’s largest automakers have introduced all-electric or plug-in hybrid electric vehicles (PHEVs) during the past year.
Partly as a response to higher retail and commercial demand, manufacturers have boosted production and attempted to decrease the delivery time for new orders. One challenge for countries that lack the infrastructure for EVs is getting public charging stations in place as quickly as possible. In dozens of nations, those networks are already operational. But in other places, it could take at least three years before EV ownership makes practical sense for everyday working people.
