Petrol prices set to rise.
Petrol prices set to rise. Kevin Farmer

Fuel prices expected to rise in the next five years

FUEL prices are expected to increase over the next five years if predictions by market research company IBISWorld hold true.

The company anticipates the price rise will be the result of a forecast rise in domestic fuel consumption, global crude oil prices and the number of motor vehicles on Australian roads.

"As a result, the purchase costs for operators in the fiercely competitive Road Freight Transport industry are projected to rise, which will put significant pressure on the industry's margins. However, adding electric trucks to road freight fleets will allow industry operators to counter the projected rise in fuel prices," said IBISWorld Industry Analyst, Jason Aravanis.

"In November 2017, Tesla unveiled its first electric semi-truck, targeting the world's carbon intensive logistics industries. Though the semi will not be available until 2019, it has already gained support from some of the world's largest logistics firms, with DHL pre-ordering 10 of the Tesla semis, and Wal-Mart and J.B. Hunt following suit."

DHL Supply Chain is expected to use the trucks for shorter distance urban freight, such as same-day customer deliveries.

"Electric vehicles will allow road freight transport companies to better compete with other forms of freight transport. The transition to electric vehicles is far cheaper for road freight operators than for coastal sea freight operators and domestic airlines, as initial outlay costs for electric trucks are significantly lower than for other vehicles. As a result, smaller road freight transport operators are likely to follow the lead of global road freight giants in the latter part of the next five-year period, and incorporate electric vehicles into their fleets. This is anticipated to contribute to industry revenue growth over the next decade, as consumers demand greener delivery methods in urban areas," Mr Aravanis said.

The fuel prices are expected to rise by 2022-23.

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