As little as 20 years ago, most large fleets would have bought their diesel in bulk and stored it on-site, but the cost of maintaining these bunker tanks, along with the ever-growing list of health and safety regulations, as well as the potential for fuel theft, has meant that an increasing number of fleets are switching to fuel cards.
Many fleets view fuel cards as a cost-effective and simpler alternative to credit cards. They often offer discounted rates for fuel and any expenditure can be automatically calculated into a single HMRC-approved invoice helping with the quarterly VAT requirement. This means there’s no need for receipt collecting, which cuts the level of administration required.
There are many types of fuel cards and providers, so deciding which arrangement is best for your business can be complicated. The good news is many fuel card companies don’t have a minimum contract length, so in most cases fleets are free to switch providers as many times as they like.
Fuel card competition is good for fleets
The fuel card industry is becoming increasingly competitive, with companies from various backgrounds (finance, fleet management, supermarkets and oil suppliers) fighting for business.
This is great for businesses, as there are better deals around, and the levels of customer care to keep clients on board are higher.
Fuel cards are also making transactions safer. Barclaycard was the first big name brand to offer a ‘chip and pin’ fuel card. Replacing the older magnetic swipe method has helped to reduce face-to-face card fraud by 72%.
All fleets irrespectove of their size can tap into the ‘buying power’ of the fuel card retailers to access lower prices which can be several pence per litre cheaper at the pump.
The fuel card company can also help identify and highlight, via exceptional reporting, potential discrepancies in spending patterns.
Allstar is the market leader when it comes to fuel cards, with more than 1.1 million active cards in the UK. A key sales proposition is its online account, which fleets can access 24/7, where lost or stolen cards can be reported and blocked within minutes.
However, Allstar introduced a charge of up to £2 per transaction last year, which put off some small and low-mileage fleets.
One alternative is to save money with an oil supplier fuel card, from the likes of Shell, BP or Esso.
By cutting out the middle man, businesses receive greater discounts on fuel and there’s very rarely a transaction charge.
However, the discount only applies in designated filling stations and, because the network coverage will be smaller, you could find yourself having to deviate greater distances to refuel, which could eliminate the savings.
Wex Europe Services offers one solution. By combining the Esso fuel card with UK Fuels, it has a multi-card offering that brings more than 3,400 fuelcourts into the network.
There are also other things to consider, such as if fuel cards can be used to pay toll charges, and whether they can be used abroad.
Paul Birkbeck, general manager of GBA Services, which has a fleet of 150 vans and 100 trucks, says his fleet uses two types of fuel card for different types of work.
Does your fuel card work abroad?
“GBA Services currently has two fuel card suppliers, one for UK-specific work and one for Europe. In both cases, a card is registered to a specific vehicle. For those vehicles operating in Europe, the fuel card will also pick up toll costs,” says Birkbeck.
“Both our suppliers offer us good coverage where we need it the most, as well as flexibility for ad hoc operations. In addition, our European partner provides discounts in our busiest areas of operation and also handles the VAT reclaim process.
“Importantly, both companies offer us detailed reporting, through an online portal. As part of our ongoing review process, we wanted to be able to link the fuel card data to the telematics systems on our vehicles so that we can compare, analyse and learn from the information we receive.”