From Energy Consumer to Energy Controller: How Businesses Can Reduce Their Exposure to Oil Price Volatility.

Following the 7th month of Middle Eastern conflict, oil prices continue to creep back up towards their April highs of $126 a barrel - causing serious concerns ahead of the winter months. But the biggest problem? It’s not just oil on the rise.

When oil prices rise, so does transport, shipping, goods – and most importantly fuel. They all go hand in hand, as fuel becomes more expensive, so does the entire supply chain and soon enough? Margins become tighter. The impact quickly spreads far beyond just the fuel pump.

Not only are businesses hit from the operational perspective with longer lead times, higher shipping costs and tighter gross margins. They are also squeezed by the ever-growing collective of more cautious buyers who become more selective with purchasing goods as they too have to navigate the increasingly challenging economic environment and rising prices.

So why is this becoming such a concern? Because businesses have no control over it. So, how do businesses reduce their dependence on something they cannot control? They move away from it entirely.

And the answer is increasingly becoming electrification.

Take a typical delivery fleet as an example. Every petrol or diesel vehicle is directly exposed to fluctuations in global oil markets. The business has no control over fuel prices, one week a single van’s fuel bill could amount to £500, the following week £600. Over an entire fleet – it adds up.

Whilst EVs still require energy, they are not directly reliant on oil. And the most beneficial factor is that the electricity used to power them can increasingly be generated on-site. Through solar and battery storage system, it further lowers dependence on global systems and their volatile markets. Simply swapping one diesel van for an EV alternative cuts running costs by over £1500 a year*.

This gives organisations greater control over one of their most significant operating costs. Rather than simply purchasing fuel at the price the market dictates, businesses can begin generating, storing and managing their own energy. Following a growing pattern of shifting from energy consumption to energy control.

The transition towards energy independence doesn't stop at the vehicle either. Once organisations begin electrifying their fleet, they begin looking at where that electricity comes from. Pair EV charging with a growing collection of solar PV and battery storage, and businesses can start generating, storing and using their own energy on-site with minimal interference from the grid. What begins as a decision to reduce fuel costs can quickly become an entire strategy focused on energy independence, resilience and long-term control over costs. An additional benefit is that businesses can simultaneously reduce operating costs, improve energy resilience and support wider sustainability objectives – avoiding the frantic transition rush in the future as all businesses scramble to comply.

The objective isn't necessarily to avoid energy costs entirely. It's to reduce dependence on volatile markets and external factors that businesses cannot control. As oil prices continue to hover around $100 per barrel for the fourth time this year, businesses are being reminded of the current reality: energy volatility remains a risk. Both operationally and financially.

Perhaps the businesses best positioned to navigate this difficult economic period aren’t the ones with the cheapest energy, but the ones with the most control over it.

To learn more about our services, contact Electric Horse™ today on 0808 164 1166 or email info@electric-horse.com. 

source * https://pegasuscouriers.co.uk