New reports show that fuel card usage amongst UK businesses is at its highest ever levels, with it now being a £7billion a year sector. Fuel expenditure is one of the largest expenses for any size company and more firms than ever are seeking ways to keep fuel costs under control.
What is driving growth in fuel card usage is a wave of new technology in the form of easy to use telematics software that tracks payments quickly and easily that also allows you to track expenses for HMRC fuel mileage payments compliantly. However, most companies feel that the primary benefits of fuel cards remain the fuel price discounts and the coverage of stations where they are accepted.
Fuel card growth goes global
Europe dominates the global fuel card market accounting for 28% of all market share, and the UK is a leading sector. In 2016, over 156,000 new cards were issued, totalling 3.3 million fuel cards in active circulation in the UK. Of those cards, 82.0% will be held by fleet vehicles and 18.0% by CRT vehicles.
Total fleet card volumes rose by 3.8% to 3,686m litres continuing an upward trend that started in 2013. That growth is also the same in the rest of the world. The global fuel cards market was valued at almost $267 billion in 2016 and is expected to reach around $401 billion by 2021.
Fuel card features
The growth of fuel card usage is also driven by the added value features that most fuel cards now contain.
Many fuel card providers offer a range of features apart from purchasing fuels such as payment of tolls, parking and reporting tools; access to real-time data; prediction of expenses; VAT recovery; breakdown assistance; payments for lubricants, vehicle accessories, car washes, food and refreshments.
Such value-added services help fleet managers minimise fraudulent claims, improve fuel management, and drive the growth of the fuel cards market. Furthermore, suppliers also send out latest news, offers and updates on fuel prices to enable customers to obtain more value from their cards.
The availability of real-time data in telematics also enables fleet managers and drivers to receive regular updates on fuel prices at locations throughout the country, helping buyers to identify outlets that offer the lowest possible fuel prices as they drive.
Fuel prices rise
Over the last two years, we have seen a gradual increase in UK fuel prices, which is another important factor leading to a rise in fuel card usage. Since January 2016, the price of crude oil has risen consistently, and it is now around at the $60-65 per barrel mark. The crude oil market price directly affects the price of fuel that we pay in forecourts. There are several factors behind the price increase, but the main reason is due to a controlled reduction in the global production of oil, agreed by OPEC, Russia and the USA.
With trends looking like the production of oil will fall, and the price of oil continues to rise, it looks there will be a slow but continued rise. Unless something drastic happens, fuel prices are most likely going to continue to rise. This is why it’s more important than ever for businesses to look at ways to ensure fuel costs are lowered, such as via fuel cards.
Fuel card technology trends
The good news is that the future for the fuel card industry looks as promising as ever if they can tackle one of its more fundamental problems: fossil fuels running out by 2050!
Payment for Electric Vehicles (EVs) is at its formative stages, but it’s only a question of time before someone launches a fuel card for fleets of EV cars or trucks.The market for electric fleets is non-existent at the moment, but Tesla has already had so many advance order for their electric trucks that they have a three-year waiting list.
Other forms of technology are soon to reach fruition in the fuel cards market, improvements in telematics technology appear to be the greatest real benefits.
Angad Singh, a procurement specialist at Technavio, “Suppliers in the market are increasingly embedding telematics interface and reporting facilities in fuel cards to improve the efficiency of fleet management. This brings about the transparency of fuel spend across the fleet as well as helps improve driver behaviour with regard to fuel spending.”
Fuel card feedback
Fuel Card Services is one of the UK’s leading providers of fuel cards. There are thousands of products out there, so finding the right ones for your business can often be hard. Fuel Card Services provides a free and impartial advice service to PetrolPrices members, where after a short consultation they can advise on the best deals to suit your business and staff.
Here are some other companies that have worked with Fuel Card Service and their feedback:
“Cost management is essential, and Fuel Card Services offers us much more than our former supplier. We now pay significantly less than the pump prices we were previously charged and no longer have to pay a transaction fee every time that a driver refuels. If we ever need anything, I always call our dedicated account manager, Rachel, and get fast, friendly help. Talking to the same person every time is so much better than joining a call centre queue to talk to a random stranger.” Jane Dodd, Accounts Director, Barwit Control Systems
“The continuing cost savings are significant, and the excellent personal service makes a real difference. For a successful and growing organisation, in a dynamic industry, the ability to make changes quickly and easily is important. Fuel Card Services is better [than our previous supplier] in every way, from the personal service to the real cost savings.” Fred Joseph, Assistant Fleet Manager, JCDecaux
“Our Shell fuel cards mean that we regularly pay up to 4p per litre less than pump prices, regardless of where the drivers refuel. As a bonus, being notified each Friday of our fixed diesel price for the coming week is a real help in cash flow planning. Even better, we do not have to factor in the transaction charges and network fees that other suppliers charge.” -Martin Drury, Managing Director, Sandwich Express
PetrolPrices fuel card offer
PetrolPrices customers get their first-year fee free with Fuel Card Services, equating to a saving of around £9 per driver. Once you have filled in a short form that takes 1 minute, an adviser will call you to discuss your specific needs and provide you with a free quote for your business. Just click on start now to begin the form.