Without paying the price

Fuel cards can provide welcome relief from rising prices, says OGCbuyingsolutions.com

Whether you are managing the family budget or a large fleet, just about everyone has been concerned about the rocketing price of petrol and diesel.
    
Fleets in the UK spend billions of pounds on automotive fuel each year, yet fuel prices are largely dictated by factors beyond our control such as the spiralling demand of the emerging nations, chiefly China and India, the effects on supply of ongoing political tensions and extreme weather events.
    
In recent months world events have conspired to push the price of crude oil to an eye-watering high of more than $145 a barrel. And though prices fell back significantly as the summer drew to a close, the price has still doubled over the past 12 months. Operating fleets of vehicles constitutes one of the largest costs incurred by organisations. The annual cost of fuel for a fleet of 100 vehicles can easily run into several hundreds of thousands of pounds.
    
The volatility of the marketplace, combined with the UK government’s desire for the public sector to operate more efficiently and sustainably, means that it is vital that organisations strategically plan and actively manage the way their fleets and drivers operate. The effective management of fleet fuel can deliver significant savings and fuel cards can be a vital component in delivering savings on this scale.

Easily managed
Fuel cards provide a simple mechanism for the UK public sector organisations to efficiently manage and control their spending on automotive fuel. OGCbuying.solutions operates a number of highly successful fuel card programmes with Arval, using the brand names MonitorCard, BP, and Esso.  
    
Public sector spend using these arrangements exceeded £280 million by the end of the 2007/8 financial year, delivering combined process and cashable savings approaching £40 million. Fuel cards offered under the Buying Solutions framework agreement are accepted at approximately 95 per cent of all UK forecourts, include a comprehensive fuel management system and can be used to buy all types of fuel including LPG.
    
And the agreements were established though an EU compliant tender process, allowing customers to access and use the programmes without carrying out a resource and time intensive procurement exercise.
    
Jim Parkinson, category manager for Payment Solutions at Buying Solutions explains the benefits: “Fuel cards put fleet managers firmly in charge of their fleets.
    
“A range of programmes have been developed to enable the public sector to work with suppliers to develop bespoke solutions that meet individual needs.
    
“The cards are issued free of charge and, subject to payment terms, there are no hidden fees. Rebates are available at selected forecourts and the programmes produce precious management information on which to make operational decisions. These management tools – which can include web-based interactive services - provide daily access to a centralised source of valuable information, tailored to the needs of individual customers, including: cardholder purchasing histories and trends; price information across fuel brands, fuel types and forecourt locations; vehicle economy and performance statistics; new and replacement card ordering; streamlined billing and reconciliation systems.
    
“Analysis of these statistics enables organisations to direct cardholders to the best prices available in their locality, reduce the miles covered by vehicles, and therefore reduce fuel usage and identify poorly performing vehicles requiring maintenance or replacement. The larger the fleet, the more significant the impact of ensuring that drivers use cheaper outlets, such as filling stations at supermarket locations rather than motorway service stations which generally charge significantly higher prices.”
    
Fuel card programmes can also radically reduce an organisation’s use of administrative resources and therefore costs. Manual, paper-based pay and reclaim systems, which require staff to process claims and reconcile receipts, are vulnerable to human errors which are time consuming and expensive to resolve.
    
Adoption of fuel cards in the UK has increased significantly in the past year with more than 187,000 public sector drivers from central government and organisations like the NHS, Royal Mail, local councils, and the prison service together with the vast majority of police forces nationwide now using fuel cards.
    
Jim Parkinson explains about further developments planned for Buying Solutions’ fuel card offering: “We have been working very closely with our key stakeholders in preparation for the next Framework Agreement to be launched in autumn 2009 and we have now commenced the Invitation to Negotiate element of the procurement process.
    
“The new framework agreement will cover the provision of fuel cards for the purchase of: fuel, lubricating oil, car wash facilities, screen wash, tyres, replacement glass, exhausts, maintenance, breakdown cover, car hire, and bunkering services.
    
“In addition it will also offer a range of fuel management and associated services.”

Card programmes
MonitorCard: Estimated to be the largest scheme of its kind within Europe, the ARVAL MonitorCard is accepted at 9,500 outlets nationally. Rebates are available to customers purchasing high volumes of fuel and comprehensive mileage capture services make private mileage calculations readily accessible.
    
ARVAL also offers a national fuel price watch scheme that can help fleet managers reap further savings on their fuel expenditure.
    
As well as being able to access services to assist with vehicle maintenance, tyres and exhausts, ARVAL customers also enjoy new carbon offsetting and footprint reporting facilities, which can help them monitor and manage the environmental impact of their fleet.
    
Esso Card: Equally suited to both large and small vehicle fleets, the Esso card can be used at over 1,850 service stations nationwide. Generous rebates are available as well as the use of Esso owned bunkering facilities on 180 sites nationwide. The essocardonline.com web portal offers a convenient way of downloading management information and managing invoicing. It can also be used to streamline account administration such as ordering and cancelling cards and conducting data searches.
    
BP Card: With four different card types available, BP offers fuel schemes that can meet a wide range of requirements. The BP Plus Card, BP Plus Bunker Card, BP Agency Card and BP Supercharge Card each deliver a unique package of customer benefits and are also characterised by the number sites where they are accepted.

For more information
www.ogcbuyingsolutions.gov.uk or call the Customer Service Desk on 0845 410 2222.