Fuel card best practice guide

fuel cardsa guide forfleet managers

Fuel cards – a guidefor fleet managersIntroductionIt is crucial for fleets to monitor fuel purchases inorder to manage and control fuel consumption.Fuel cards can provide good quality data on fuelpurchases, helping you to monitor individual vehicleand driver fuel economy, and implement effectivestrategies to improve performance.Fuel accounting can be facilitated by methods such as credit card or petty cash. However,they can be time consuming and not provide the requisite level of control. Fuel cards offerpotential benefits for fleets in five areas:1. Reduce costs of fuel purchases.2. Allow you to accurately separate thecosts of business and private mileage.3. Provide information which allows youto reduce fuel consumption.4. Reduce security risk.5. Minimise administration and ensurefuel accountability.This guide, published by the Energy Saving Trust, will explain these benefits andhelp you to make an informed decision about fuel cards for your organisation.2

Fuel cards – a guidefor fleet managersWhat is a fuel cardand how does it work?A fuel card looks like a credit card, and works in a similar way.It allows drivers to charge the cost of fuel to an account whichis settled, usually monthly in arrears, by their employer.Unlike a credit card, interest is notapplied to purchases. However, most fuelcard suppliers charge an annual fee.Fuel cards are increasingly chip and PINprotected and can be embossed tospecific company requirements.At the point of purchase, the transaction iscarried out in the same way as with anycard. The vehicle registration number andmileage are recorded.The consolidated fuel card invoice whichorganisations receive shows informationincluding the date, time and place ofpurchase, the fuel type and transactionvalue. The fuel card report significantlyreduces administration costs compared toother methods of tracking fuel purchasesand eliminates the need for receipts. Inaddition to the detailed invoice most fuelcard suppliers will be able to provide furthermanagement reporting.3

Fuel cards – a guidefor fleet managersHow can fuel cardsbenefit your organisation?A fuel card can provide a simple, convenientand secure way of taking control of your fuelexpenditure and improving efficiency.There are five general areas where fuel cards can help.1. Reduce costs of fuelpurchases• Fuel card reporting allows the tracking of fuelspend, the type of fuel purchased and thepurchase location. This can help to encouragethe use of lower cost sites and the purchase ofstandard rather than premium fuels.• Fuel cards give you the opportunity to bettermanage the cash flow for fuel since you pay forthe fuel purchases on a regular basis every month.• You can set limits for fuel card usage, forexample to mandate drivers to purchase fuelat supermarkets rather than motorwayservice stations.• Some fuel card providers offer fixed prices whileothers offer pump price charges. In the lattercase, if they cover a wide network of fillingstations this gives you and your drivers theflexibility to select those with the cheapestpump prices.2. Allow you to accuratelyseparate the costs ofbusiness and private mileageUsing a ‘fuel at cost’ approach in conjunction withfuel cards will enable actual private mileage fuelcosts to be recovered from drivers. This is a bettersolution than using a fixed rate per mile as itencourages efficient driving during both business andprivate use of the vehicle and is the fairest way ofdetermining the cost of private mileage. The simpleexample below shows how this can be calculated:Value of fuel purchased in one month £240Total monthly mileage (business & private) 2,000Monthly private mileage 500Pence per mile (£240/2,000 miles) £0.12Private mileage deduction(500 miles x £0.12)£604

Fuel cards – a guidefor fleet managersConsiderations whenchoosing a fuel cardFuel cards record excellent data, reduce risk and savemanagement and administrative time.Like other payment cards, the choice is broad.Most of them offer more or less similar benefitsbut some present slightly different features thatcould possibly better meet your needs. Whenchoosing a fuel card, ensure you understandyour organisation’s needs as this will help youselect the appropriate provider. Factors toconsider include:• The areas in which your drivers usually travel.• Where you are based.• How many vehicles you operate and whattype of fuel they require.• Your current average monthly fuel cost.Based on this information, you can then selectthe features that you require. The key areas toconsider include:• Price of fuel: some providers offer discountedfuel prices, but usually only to large fleets. Itis more common for the forecourt pumpprice to be charged.• Network coverage: some cards are restrictedto only one brand of service station; otherscan be used at a range of different locationsincluding supermarkets.• Management reporting: the level of reportingyou receive will vary between fuel cardsuppliers. Consider the requirements forreporting within your organisation and thedetail required.• Restricting purchases: it is possible torestrict what is purchased on the card, butthis may vary between providers.7

Fuel cards – a guidefor fleet managersNext stepsEnergy Saving Trust canprovide free advice andinformation on allaspects of sustainablefleet management.Our services include:Fleet Health CheckA free online tool to calculate your fleet carbon footprintand provide simple recommendations about where andhow you could cut costs and emissions..Green Fleet ConsultancyOur Green Fleet Consultancy Service can help you cut fleetcosts and carbon emissions whilst enhancing your corporatesocial responsibility. Whether you need a detailed Green FleetReview to identify the cost and carbon saving opportunitiesacross your fleet or you have a specific challenge to overcomein one area, we can help.As well as calculating a fleet carbon footprint, our FleetConsultants can analyse and advise you in the following areas:• company car policy• fuel management systems and processes• grey fleet management• data management• mileage reduction strategies.Ecodriving TrainingSubsidised ecodriving training delivering fuel savingsand safety benefits is available directly from the trainingcompanies listed on our website.Webinars and Fleet BriefingRegular webinars and a monthly newsletter which covera range of topics to help you reduce emissions and cutfleet costs.8

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