Fleet News

£4 gallon prompts fuel alert to fleets

THE average price of fuel has now surged past the £4-a-gallon mark for diesel, adding thousands of pounds to company fuel bills.

For a 100-vehicle fleet, each doing 10,000 business miles a year at 45mpg, the increase in prices since the beginning of last year has added more than £5,000 to annual fuel bills.

The increase demonstrates the importance of how fleets deal with fuel, as stated in the Fleet News FuelWise campaign, launched in association with fuel card supplier Arval. Fleets were urged last summer to introduce contingency plans as experts feared motorists were heading towards the £4 a gallon levy.

The average price of super unleaded is now £4.10 a gallon, diesel is £4.05 and four star £4.00.

Unleaded still remains under the £4 mark standing at £3.85 but as prices have surged by almost 10p a litre since the start of 2004 it is vital that fleets act immediately if they have not already done so.

Mike Waters, head of market analysis at Arval, said: ‘Fleets must have a really clear focus on managing their fuel spend. Sometimes, fuel spend comes second to service, maintenance and repair (SMR) costs but it now needs to be a key part of any fleet operating policy.’

Fleet managers need to ensure drivers are abiding by any fuel policies in place which includes using the most economical filling stations in the area.

Waters said: ‘The key point is to make sure drivers have access to a wide network of supply. There are differences in price between sites and fleets need to target drivers to use cheaper brands and suppliers.Fleets can also link fuel spend to the overall fleet policy.

Driver training, driving styles and driver attitude can all be linked to fuel and reducing fuel spend.’ The average price of diesel now stands at 89.2p per litre, unleaded at 84.7p, super unleaded 90.1p and four-star 88.1p.

FuelWise campaign shows the way

THE Fleet News FuelWise campaign, in association with Arval, aims to help fleet decision-makers deal with the challenges of impending changes to the way firms deal with fuel.

Last month, fleets were warned of the full impact of a European row over fuel and VAT.

The European Sixth Directive wants to ensure that if companies are going to reclaim VAT on fuel purchases, that purchase was made by a VAT-registered company. If an individual purchases the fuel using a private card or cash, then the employer cannot reclaim VAT. Estimates vary, but a worst-case scenario puts the cost to the fleet industry at £1.2 billion.

The ruling affects a wide variety of transactions, but one of the most wide-ranging is pay-and-reclaim, where a driver buys a tank of fuel and then claims back the cost or simply claims back mileage at a set pence-per-mile rate.

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