Under the Microscope: We talk to BP Fuel Cards boss Andy Allen
25 May 2017
Author: Debbie Wood
The world of fuel cards is changing. No longer is it just about using a card to pay for company fuel and provide an easier way to control fuel spend: there are now a range of additional services and products being launched, all aimed at making life easier, simpler and more cost-effective for the fleet manager.
BP is one of the largest fuel card providers here in the UK and for Andy Allen, the firm's head of fuel cards, it's an exciting and busy time as the company evolves its products to keep ahead of the competition.
"The different types of customers out there is one challenge but also there's the ongoing offer development. There's a huge amount coming and being worked on at the moment," he tells BusinessCar. Although some fuel companies are now looking to consolidate their sites and scale back investment, BP is striving for growth.
Already with one of the biggest footprints across Europe, with 17,000 forecourts across 29 nations, here in the UK BP is the biggest, with 1,300 branded sites across the country.
Coverage is an important requirement for fuel card customers and recent cross-partnerships with Esso, Texaco and Gulf has enabled drivers to use over 3,000 sites, with another 300 Esso sites offering BP card acceptance being added later this year.
"There's been a bit of recuperation from other brands closing sites. However, we've been investing and looking to grow," Allen explains. "I would say that we have one of the fastest-growing fuel cards here in the UK."
BP's fuel card business has experienced exceptional growth over the past 12 months, with 50,000 new cards registered, taking the grand total of BP fuel cards in the UK up to 500,000.
According to Allen, a lot of this growth is coming from the SME market, especially courier companies that have introduced same-day delivery services and need to lock down their spend.
But it's not all about numbers at BP. Allen and his team are looking closely at raising the quality at the forecourts, including a new partnership with M&S for food last year, improving the overall facilities at sites, and looking into introducing dwell spaces for people to take a break during longer journeys.
"We've been investing to raise the quality of our sites, so hopefully they are now in better locations and more geared towards the professional driver," Allen says. "We want to recognise what these long-distance drivers need and a lot of that is around food quality and access to facilities, and there'll be a lot of investment over the coming years on improving this.
"A lot of the growth is fuelled by the M&S partnership which is fantastic for us in the UK, so we're adding another 30-plus M&S Food sites this year and the target is to grow that footprint up to around 1,500."
There's been a great deal of fluctuation in fuel prices over the past few years, even more so following the Brexit vote. Unfortunately, more is expected as dramatic changes to oil pricing and the strength of the pound continues to affect the prices we pay at the pump.
Oil prices, one of the two key things affecting fuel pricing, bottomed out at $29 a barrel in February last year, went up to almost $60 at the end of 2016, and has now dropped down to $48.
According to Allen, there is still a great deal of uncertainty around fuel prices and that will continue for the next 18 months as the general election and negotiating period with the EU is likely to have an impact.
Services like the Fixed Price Guarantee and capped pricing from BP are proving key for many fleets, enabling them to lock down prices from anywhere between one month and three years into the future.
"If you don't lock the fuel prices in and you're operating on a 2-3% profit margin, any significant rise in fuel could potentially wipe out a company's complete profit and I'm amazed more people don't look at doing this," Allen explains. "There are lots of customers who opt for two years fixed pricing so they can ride out Brexit, and hopefully by the end of it we will have a clearer picture of what the future looks like for the UK."
Despite the press and legislative backlash against diesel, there's been little impact at the pumps yet. However, BP has seen an increase in petrol demand, which has been on decline for a number of years up until now.
"If you look at what's been happening in the market over the past few years, every year we've seen a reduction in petrol demand. We haven't necessarily seen a reduction in diesel demand as of yet, but what we have seen is a slowing of the petrol decline, which probably indicates that there is a switch happening between petrol and diesel," Allen says.
We've talked a lot in this issue about hydrogen and electric car technology and one of the key stumbling blocks for many fleets is around the limited infrastructure for those drivers that need to travel across the country.
Hydrogen is very much a technology that BP is watching to see how it grows here in the UK, but for electric, the firm already has plans to introduce charging facilities at the forecourts.
"It's clear there's a desire for organisations to look at EV technology and come up with a solution that meets green requirements and future-proofs themselves from legislative changes," Allen says. "Are we looking at installing charging points at forecourts? Yes, there's a task force here looking into it, not just for the UK but across Europe. In the Netherlands there are currently four sites which have EV rapid charge points."
The challenge for BP when it comes to installing charge points is around the acceptance of cards, and Allen recognises that the network will be key. It can't just be the 1,300 BP sites that accept BP fuel cards when charging - it needs to be a wider and broader strategy.
"If we only had acceptance of cards for charging at the 1,300 BP sites, would it be as attractive and would people be worrying about having to find a site?" he explains. "When it comes to EVs, we need to work out a way to allow people to charge on a very broad network across the UK in a very simple fashion, and this is where we will be focusing our attention in the short term and trying to meet the needs of the fleet managers."
BP isn't a company that likes to stand still, and with the rapid development of technology it's important for the firm to keep evolving its services. Putting the fleet manager at the centre and developing additional services that will make life easier is key for Allen and his team.
"For the fleet manager it comes down to two things: ease of doing business and cost. If we can tick both boxes then we have a winning proposition," Allen says.
BP is currently trialling a tolls and tunnels function which will allow automatic payments made to the fuel card and, if councils sign up to different congestion charges in the future as part of the Government's new air quality plans, the company is also looking to introduce an automatic payment service to help fleets keep those different charges in check.
Contactless payments is another area which is being developed. In Australia and New Zealand a product called BP Me has been successfully trialled, which allows contactless payments at the pump via an app, and a similar service is expected to be launched in the UK soon.
"One of the things we always hear from customers is that forecourts are too busy. For those drivers that just want to fill up and go, it will be an exciting prospect," Allen explains. "The BP Me solution works really well and there is a roadmap to push it out to the rest of Europe. It's been successfully trialled now and it makes perfect sense to bring it over to the UK."
It's all part of the firm's bigger objective to make life as easy as possible for fleet managers when it comes to controlling fuel expenditure and it's something which Allen puts as his number one priority.
"Convenience and control is why people use fuel cards. People are time-poor and that's where we see ourselves as being able to provide a benefit back to the fleet manager."