Category: Fuel Cards

We’ve all been there. You go to fill up your car, see the price at the pumps and think to yourself, ‘how much?’ Fuel pricing is a complex equation that’s made up of many moving parts, so it’s understandable if UK fuel prices are a bit of a mystery to some.

At Fuel Card Services, we’re all about transparency. As such, we’re keen to explain just what goes into setting the price for petrol and diesel in the UK. Read on to find out exactly what makes up the price you pay per litre.

What impacts UK fuel prices?

Fuel pricing in the UK is made up of three predominant factors. These are:

• Combined wholesale cost, distribution cost and retail margin.
• Fuel duty owed to the government.
• VAT.

Wholesale, distribution, and retail margins determine the cost of purchasing petrol for a retailer, while costs involved in shipping and storage of the fuel (getting it to individual sites) and the actual margin (profit) on each litre.

UK fuel prices also track closely to the price of Brent Crude oil as traded on global markets. These markets are regulated by the Financial Conduct Authority in the UK.

The impact of oil on fuel prices

Figures from the RAC Foundation show that UK petrol prices remain lower than the ten-year rolling average. This is due to a number of underlying factors. A drastic fall in Brent crude oil prices was seen at the start of 2020. It came in the wake of oversupply by the Organization of the Petroleum Exporting Countries (Opec) and a price war between Russia and Saudi Arabia.

While this pushed down the price of crude oil per barrel, the impact of the coronavirus pandemic served to push up distribution and retail costs. As a result, petrol and diesel prices remain lower than average, but are not tracking as closely to oil markets as they used to.

Russia’s invasion of Ukraine in early 2022 saw the cost of crude oil, already inflated from the global pandemic recovery, shoot up. With Russia as one of the biggest producers of natural gases and oil, this had knock on effects particularly in European countries, Russia’s main market. As the European Union cut its import of Russian oil by two-thirds, costs of fuel reflected a new scarcity.

So, who’s responsible for setting fuel prices?

Ultimately, there is no single body that sets the price of fuel in the UK. It’s up to individual retailers to make that decision based on the level of margin they want to receive and the other factors we’ve previously listed. Pump prices can therefore change on a daily basis.

Fluctuation in the price of oil will have an impact on the amount we all pay at the pumps, as will any changes in duty or VAT. That said, it is up to each retailer to decide if they want to pass on any cost increases or decreases to the end consumer.

Will petrol still be available after 2040?

The UK is set to stop the sale of new petrol and diesel vehicles at the end of the decade as part of the Government’s efforts to move the country towards NetZero 2050. The sale of new combustion engines drawing to a halt will not have an impact on the sale of petrol and diesel, and with many drivers still using petrol and diesel engines its unlikely that these fuel types will be removed from the market before 2040.

What will happen to petrol cars after 2035?

With the 2030 ban in place, new combustion engines will no longer be legally sold but the sale of these vehicles second hand will continue for the foreseeable future. What the ban on new combustion engines aims to achieve is to encourage the uptake of electric and hybrid vehicles; creating a steady move towards newer, green models for travel.

As time passes and existing combustion engine vehicles age, we will likely see more EVs on the road, reducing our need for petrol and diesel. With cars having an average lifespan of around 13 years, we can expect to see the number of petrol and diesel vehicles deplete in the decades after the ban comes in.

How to find the cheapest fuel

So, what does this all mean for motorists? Finding the cheapest fuel should be a priority; why spend more when you don’t have to? As a result, we aim to make it easy for our customers to get the best deals – which are then passed on to fleets and employees using company cars.

One way to find cheaper fuel is to take out an account with Fuel Card Services. Our fuel cards can deliver up to 10p per litre off the price at the pump for cardholders. At the same time, we offer vehicle and asset tracking through our Tele-Gence service. We also provide accurate reporting of your mileage expenses – both are essential tools that can help to cut costs for fleet drivers.

Searching out the best deals is not always easy, though. Find the nearest place to fill up by registering for our Pump Locator service, available through our free Drivers Club mobile app.

You can find out more about the wide selection of fuel cards we have to offer – including all the biggest names, such as BP, Esso and Shell. Use our handy guide to compare fuel cards to determine the product that’s right for you and enjoy cheaper fuel today.

Reducing costs should be a high priority for every business. One of the easiest ways to do this is to examine the amount of fuel your drivers are using and work to reduce fuel consumption. Fuel consumption will be different for every vehicle but, if you know what you’re doing, there are savings to be made.

According to the UK Retail Road Fuels Market 2019 report from the Petrol Retailers Association, a total of 46.5 billion litres of fuel were used by businesses across the country in 2018. That’s a staggering figure, but one which highlights the scope of potential savings.

Here we examine 5 things that will reduce fuel consumption. Ultimately, a few simple changes could lead to significant savings for those who get it right.

What increases fuel consumption and what reduces fuel consumption?

Many variables impact the amount of miles per gallon drivers will see from their vehicles. As such, maximising your savings on fuel can be complex, but some simple measures deliver consistent results.

One of the biggest contributing factors is the weight of the vehicle – heavier loads require more fuel to carry. As a result, you should reduce the amount of unnecessary items in your vehicle. This includes things like roof racks, roof boxes and bike racks, which not only add weight, but can also significantly increase fuel consumption due to increased air resistance.

Indeed, RAC patrol Chris Burgess advises: “Avoid keeping heavy loads and loose items in your car when not required … and don’t forget to remove luggage racks and roof bars when you no longer need them.”

Meanwhile, tyre pressures can also have a large impact on fuel efficiency. Take the time to regularly check the psi of your tyres and ensure they are in line with the manufacturer’s recommended pressures. Remember, there’s often a different recommendation for the front and rear.

Correctly set tyre pressures could help you to save a large amount of money, as any drop-off in pressure will increase the amount of friction between the tyre and the road. The flatter your tyres are, the more fuel that’s required to overcome this force and keep your vehicle moving.

How to reduce fuel consumption by changing your driving style

One of the most beneficial changes drivers can make to reduce their fuel consumption is to amend their style of driving. There are five key pointers that every motorist should be aware of:

1. Does driving slowly reduce fuel consumption? – Your vehicle will use more fuel whilst accelerating. As such, smoother driving, not necessarily slower driving will limit the need to brake hard and accelerate hard, will reduce fuel consumption. The higher revs your engine is asked to make, the more fuel it needs. Gentle acceleration is therefore more efficient – and also much more pleasant for you and your passengers.
2. Turn off air con – Many modern cars have air conditioning installed. However, what you might not know is that turning it on uses fuel. As a result, you can reduce fuel consumption by opening the windows when you want to cool down. While this can increase drag, it’s more fuel efficient than air conditioning.
3. Anticipate the road ahead – Backing up the need for smooth driving, you should consider the road ahead if you want to avoid unnecessary braking. Remember to look up the road to anticipate potential problems. Keep an eye out for upcoming traffic or possible hazards and you can slow down smoothly to avoid harsh braking.
4. Stick to the speed limit – Speed is one of the biggest factors in determining fuel consumption. When you exceed the national speed limit of 60 mph, fuel usage will dramatically increase. This is due to the engine having to work harder to maintain a higher speed. For example, driving at 80 mph uses 40% more fuel than at 60 mph.
5. Plan your journeys – Knowing where you are going and how to get there can significantly reduce your fuel consumption. Limiting the number of wrong turns means you’ll reduce the overall mileage of your journey. It’s therefore important to always plan your journeys in advance, ensuring you factor in breaks when travelling long distances.

When you follow the advice above, you’ll not only be fuel consumption, you’ll also be making yourself a safer, better driver. Being aware of what is happening around you is essential for all drivers. At the same time, being more organised with your planning means fewer distractions when you take to the roads.

Save money by investing in fuel cards

Away from a more general change in driver behaviour, there are other ways to save on the cost of fuel, observe driver behaviour and therefore work to reduce fuel consumption.

Fuel cards represent an easy win for businesses and individuals, as one of the biggest benefits of opening a fuel card account is the savings you can make. Not only that, but they also help streamline the management of fuel expenses. You receive a single invoice covering all transactions and eliminate the need to carry physical cash to fill up your vehicles, using your card instead.

At Fuel Card Services, we pride ourselves on our competitive rates and making sure our clients are always looked after. You could save up to 10p per litre on the cost of petrol and diesel when signing up with us.

Find out more about the wide selection of fuel cards we have to offer – including all the biggest names, such as BP, Esso and Shell. Use our handy guide to compare fuel cards to determine the product that’s right for you.