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Budget causes UK fuel price fall

20th April 2006, Page 28
20th April 2006
Page 28
Page 28, 20th April 2006 — Budget causes UK fuel price fall
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Which of the following most accurately describes the problem?

Despite the dip, UK prices are still the highest in Europe, but choosing the right method of fuel payment could keep you competitive.

Jon Brooke-Langham, Keyfuels

Fuel prices in Europe have remained fairly stable this month, with no changes in Belgium, the Netherlands, Spain or the Czech Republic. Although UK prices (£0.94/€1.35) are still the highest in Europe, €0.19 higher than the second-highest country. Italy (€1.16), we have also seen the greatest decrease (-1.48%). The lowest fuel price is in Poland (€0.94) .

The high prices in the UK are partly because our duty on diesel is €0.67 per litre against a European average of just €0.32 per litre, The unusual fall in UK fuel prices this month may be attributed to the Chancellor's Budget Statement on 22 March in which diesel duty rates were frozen until 1 September. However, duty rates will rise in line with inflation from 1 September on the expectation of world oil prices stabilising.

With about one in eight of the heaviest vehicles on UK roads coming from overseas, competition against foreign vehicles working on cheap European fuel is tough. Efficient fuel use is the most important tool that UK fleet operators have to control their costs and remain competitive.

Choice of fuel payment is key to fuel efficiency. Cash: credit cards, local account and fuel cards all have their pros and cons.

Although cash and credit cards are accepted everywhere, their many drawbacks include the risk of theft and total lack of control over where and what is purchased. Local accounts with garages have the opposite set of problems. Although they give control of where drivers purchase fuel, they restrict the choice of garages, even when prices rise.

For the majority of fleet operators, fuel cards offer the best solution. Benefits include a reduced risk of fraud, transparency of fuel purchase, simplified administration and greater overall control.

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