Fuel Prices Now Account for 25.6 Percent of the Total Cost to Own and Operate a Vehicle
BOSTON, Mass., June 13, 2018 – Motus, the premier vehicle management and reimbursement platform, released its annual Fuel Trend Report, revealing key data related to current fuel prices and industry changes that will affect prices over the next year. The “2018 Fuel Trend Report” found that the average price for fuel in the U.S. is now at its highest point in almost three years. The increase corresponds to a steady rise in fuel prices since September 2017 due to the rebalancing of oil supply and demand after a period of relatively stable fuel prices.
“Summertime is the season of peak demand across the U.S. Over the past three years national fuel prices have increased by an average of $0.18 per gallon between April and June,” said Ken Robinson, market research analyst for Motus. “In the coming months, drivers can expect this trend to continue. We predict that average national fuel prices will peak over the summer months between $3.00 – $3.15 per gallon.”
The report also found that over the past seven months, fuel accounted for 25.6 percent of the total cost to own and operate a vehicle, which is also at the highest percentage in three years. Over the next 12 months, Motus anticipates an increased average national fuel price of $2.70-$2.80. This will increase the cost to own and operate a vehicle by up to seven percent over the next year.
“As the company that calculates the annual IRS Safe Harbor rate, we are intimately aware of the flaws in using a uniform approach for mileage reimbursement. The model just isn’t flexible enough to reimburse all employees fairly,” said Craig Powell, CEO of Motus. “Whether using a cents-per-mile, flat allowance or company car program, treating all employees the same and not responding to the variances in fuel costs, individual geography and miles driven creates an unfair market for drivers. This report highlights how just one variable can exacerbate the inherent inequalities of current reimbursement programs and why the only fair approach to reimbursement is the IRS-approved fixed and variable rate methodology.”
Additional findings in the 2018 Fuel Trend Report include:
- One of the main drivers of fuel prices is the crude oil market. Crude oil accounts for 57 percent of the cost of a gallon of gas.
- Global demand for fuel has been growing each year as nations continue to develop in a strong global economy. From 2015 to 2018, China’s fuel consumption has increased by an average of 510,000 barrels per day, while demand in the U.S. increased by an average of 310,000 barrels per day.
- Americans drove a total of 38.3 trillion miles in 2017 – 724 billion more miles than they did in 2016. This increase in driving has also contributed to a growing demand for fuel in the U.S.
- Since late 2017, the U.S. has become the second-largest oil producer in the world, which has helped stabilize the oil market by filling gaps in supply and keeping fuel prices affordable. Since the U.S. has increased its monthly crude oil production, oil prices have averaged $52.30 – far below a 2016 prediction from Morgan Stanley that oil prices would exceed $80/barrel.
To access the full report, please visit http://in.motus.com/2018-fuel-trend-report.