Fleet Operators Hit by Rising Fuel Costs and Transaction Charges

April 17, 2013 - PRLog -- Fleets are paying almost 5p per litre more at the pumps than they did at the start of the year.

Not only this, says Staffordshire fleet solutions business Motiva Group (http://www.motivagroup.co.uk/), many companies which give fuel cards to their drivers are being hit by charges that often go unnoticed.

Latest figures from the AA show that the average price of a litre of diesel in the UK was 145.10p in the middle of February – up from 140.32p in the middle of January. Petrol stood at an average of 138.32 pence per litre, a rise of 5.61p a litre.

The motoring organisation said a combination of rising wholesale prices and the weaker position of the pound relative to the U.S. dollar were the root of the problem.

It said fleets had been caught between “the pincers of a pound weakened against the dollar and soaring wholesale prices”, both of them a result of stock market speculation.

Martin Franks, business development manager with responsibility for fuel management at Motiva (http://www.motivagroup.co.uk/), said: “Fuel is usually the second-highest cost of running a fleet after depreciation, so increases at the pump have a real impact on cash flow and the bottom line.

“Fuel cards linked to commercial pricing can be a really effective way of bringing those costs down by between three and eight pence per litre, but things aren’t always as they seem.

“We’ve been noticing a tendency for some card companies to add a charge of between £1 and £2.50 per transaction. That soon adds up – especially for large fleets. It’s possible fleet managers won’t be aware of this charge at all, because it usually only becomes apparent at the invoicing stage.

“The vast majority of businesses are being affected by rising fuel prices, but for those firms accepting these transaction charges it’s a double whammy – at a time when many firms are still struggling because of the general downturn.”

Mr Franks urged fleet managers to talk to finance directors regularly to ensure invoicing reflects the original agreement with the fuel card supplier.

He added: “There are real advantages to using fuel cards. They can cut costs, they improve and simplify administration and they put a downward pressure on business mileage claims. But those benefits can be eroded if finance departments are signing off invoices that have been beefed up with transaction charges.”

Stoke-based Motiva Group operates a fleet of about 5,000 cars and commercial vehicles through its contract hire division.

It has its headquarters at the Minton Hollins building on Shelton Old Road in Stoke and it also has a site in Bucknall.

It offers car and van fleet solutions, including short-term rentals through its M-Way (http://www.motivagroup.co.uk/services/rentals/) brand, funded or non-funded fleet provision, fleet and fuel management and short-term contract hire under the Lite-Lease (http://www.motivagroup.co.uk/services/lite-lease/) banner.

Fuel management services include current arrangement reviews, fuelcards, bulk fuel supply and hedging.

Some of the cards feature commercial pricing that is fixed weekly, and they can be linked to in-depth, web-based mileage capture software – information that reduces the internal and HMRC reporting burden and cuts costs by accurately auditing private mileage. There are no transaction charges.

http://www.motivagroup.co.uk/