The arguments in favour of fuel cards reached their peak last summer when fuel prices were rocketing. But now that stability has returned, Tom Webster questions whether they still have a pivotal role to play
It’s estimated 40-50% of company cars are filled by fuel card, and those in favour of them claim they make sound business sense.
David Rawlings, head of fleet consultant Business Car Finance, says they are “a good method to reduce admin” as they remove the need for large amounts of fuel receipts.
Meanwhile, providers such as Esso point towards a “simplification of fuel cost management” and “high quality fuel at a very competitive price” due to the deals they can offer on their own brand. Ranjeev Baines, head of UK fuel cards at BP, adds: “It makes reclaiming VAT easier for fleet managers, with detailed VAT-approved invoicing.”
However, 50-60% of company vehicles still rely on other methods of paying at the pumps. James Langley, director of industry consultant Fleet Intellect, reckons this is down to a misunderstanding of the concept.
“There’s a massive connection that a card equals free private fuel,” he says. “That is manifestly not the case, but a lot of people see it that way.”
The perception arises because drivers inform their employers of how many business and private miles they have covered. The company then charges the driver, using HMRC’s advisory fuel rates, for their private miles. However, it’s a system that relies on the driver’s honesty, and is potentially open to abuse.
Given a fuel card brings charges from the operating company, Langley also concedes that small fleets based in a local area may choose alternative funding methods.
“There is a higher cost per card for a smaller fleet so there is an economic factor there,” he says.
But for every other fleet the decision is almost a no-brainer. Now that wider economic woes are attracting the attention, and with 25% of fleet costs accounted for by fuel, it makes absolute sense for fleets to remain focussed on managing their drivers’ fuel expenditure.