Crude oil price drop 'costing garages'

The global downturn in crude oil prices may be making prices at the pump cheaper for motorists, but it’s also costing mechanics who run their own workshops extra money.

Garages had been able to sell off waste oil for recycling after it was removed from vehicles during services. However, the plunge in prices on the world markets mean there is no longer the same demand, and in many cases, garages are now having to pay to dispose of the used oil.

The price of petrol and diesel is obviously something that motor businesses need to watch. And while cheaper fuel may encourage customers to consider vehicles with bigger engines because they are now more affordable to run, there is the oil disposal flipside to consider. It’s one of the administration costs you need to think about, alongside getting the best deal on your motor trade insurance or combined motor trade insurance policies.

Phil Evans, from the RE:Group, which recycles oils to make fuel, told AM-Online that it was a “sting in the tail” for garage businesses because they now have to pay to have old oil removed.

Evans said: “It would be natural to think that garages would gain all-round from cheaper oil, but that is not the case. Charges for disposal look like remaining for some considerable time.

“The price of our service to the industry has to reflect the fact that, upstream, we are competing with virgin fuels, whose price, as we all know, has come down at an extraordinary rate.

“We have now reached the point where the value of the recovered fuel is lower than the cost of recovery and, as such, waste producers are required to contribute to the recovery cost.”

However, he said that the cost of refined lubricating oils has fallen for garages buying in stocks.