However the “rise linked to inflation rate” strategy is interesting when the inflation rate was minus 0.1% in April, September and October, flat zero in February, March, June and August with plus 0.1% in May and July. But then any rise in transport costs is going to bring a rise in inflation.
At least it’s better than the spectre of the penal fixed fuel escalator introduced by the Conservatives in 1993 and then maintained under Labour until fuel protests in 2000 after taxes had risen to 80% of the cost of a litre.
Businesses have benefitted from the duty freeze for the last few years … However this announcement will mean that businesses will need to monitor fuel consumption and keep a watchful eye on spend
But while fuel is almost becoming small change in the household spending league, the taxing change is an alert to businesses to watch every penny.
According to Claire Alderson at fuelGenie, the fuel card provider, businesses should either be prepared to shop around for the lowest fuel prices to avoid running costs creeping up again or consider a fuel card to control fuel spend.
“Businesses have benefitted from the duty freeze for the last few years and I suppose it was inevitable that this would come to an end. However this announcement will mean that businesses will need to monitor fuel consumption and keep a watchful eye on spend.
“It’s all too easy for businesses to simply allow their employees the choice to fill up at any petrol station and pay top whack for fuel. There are plenty of ways to control fuel costs more effectively and fuel cards are definitely an option worth considering. If fuel duty rises by just two or three pence next year, the increase to businesses, particularly smaller businesses, will be noticeable. It soon adds up!”
Alderson argues that fuel cards are simple ways for businesses to track spend on fuel. “Fuel cards offer very sophisticated reporting for management whilst easy-to-use and administer. Business owners can set card usage limits; ensuring fuel is only purchased from certain retail establishments such as supermarket forecourts which tend to offer cheaper prices. We would also advise businesses to look more closely at driver behaviour as a heavy right foot will undoubtedly increase fuel consumption!”
