HOPE, IN TIMES OF HIGH INFLATION

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April 2022

For those that work in the transportation and fuel sector, the oil price has become a rollercoaster of expectations and emotions. During this year, the hard economic recovery, the conflict between Russia and Ukraine, and the restrictions of COVID-19 in the Chinese territory have added volatility to this essential raw material in multiple industry sectors. As a natural consequence, the international trade markets are registering prices well over 100 USD / barrel.

With the highest prices of oil recorded, inflation is a huge threat for 2022. Recently, the IMF revealed the projected inflation for 2022: “5.7% in advance economies and 8.7% in economies with emergent and developing markets”. To confront this problem, Is there any alternative for the transportation and fuel sector?

Efficiency, the answer to the inflation

Traditionally, efficiency has been considered as the adjusted use of resources for the achievement of the goals in an organization.  In these adverse times, companies must avoid interruption of activities.  Spending less and investing more in solutions that promote the growth of the organization is the key. A more competitive and dynamic operation allows companies to improve pricing to customers, decrease internal operating costs, and increase profits. Furthermore, increasing the quality of goods with less cost promotes the opportunity for higher sales volumes.

In this equation, depending on the industry, between 42% to 47% of the operational costs are linked to fuel; without any doubt, fuel is one of the highest operating costs.  Now, if your operating cost is reduced between 5 to 10%, then you are talking about efficiency.  This efficiency is also expressed in the access to daily information, in real-time, with contrasted data which allows you to anticipate deviations.  In conclusion, if inflation pushes down your operations, you need to apply efficient and economic fuel control methods that help you reduce operating costs and maintain the performance of your organization.

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Expensive oil demands efficient companies

IA fact in 2022: Oil reaches its higher price in 7 years because of the crisis in Ukraine. The barrel of oil broke the 100 USD barrier and this reality demands that companies that work with their derivatives take measures to avoid irreparable losses

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