Route One Tracker

Operating Costs

Fuel:

• Whilst the bulk diesel spot price has reduced slightly (0.18% on the month)
• The index for the price of crude has fallen by 5.15% as the front month as the market rose to 69.97 USD/barrel
• Current trend continues the hike in oil prices that started in mid-February when a barrel was trading at just 35 USD/barrel, half today’s price
• As these input prices filter through to production we can expect to see further increases in the pump and contract prices
• However, these increases may not be sustained…
• Revised forecasts for global oil consumption released last week mean that OPEC’s cushion of spare supply will more than quadruple next year to 7.78m barrels per day

Wage Inflation:

• There are signs that the pressure on operators costs will continue to ease
• The index for private sector wage inflation has increased this month to a new high of 110.34 as % change from previous year dropped to 2.6% from 2.9% last month
• With consumer price inflation falling still further to 2.2% in May, there is clearly further scope for further tightening by operators