It's an important variable in your fleet's operational cost, especially in a time when fuel prices are rising, but what exactly is fuel duty? How does it affect your fleet in 2023? And most importantly, how can you manage it effectively to prevent it from draining your resources?
In this blog post, we're going to take a deep dive into the world of fuel duty and share some practical ways to help you keep your fuel costs under control.
What is the current rate of Fuel duty?
As part of the 2023 Budget, fuel duty was frozen at £0.5295 per litre until at least March 2024.
This rate applies to most types of fuel used in road vehicles, including unleaded petrol, diesel, biodiesel, and bioethanol. Some alternative fuels, such as liquefied petroleum gas (LPG), natural gas, and electricity for electric vehicles, have lower rates or are exempt from fuel duty altogether.
With fuel duty rises forecast from April 2024, it’s important to plan ahead to avoid this significantly increasing your fleet operating costs.
“Based on announced policy, petrol and diesel duty rates are set to rise by 5p plus RPI inflation in April 2024 and by RPI inflation every year thereafter.”
How to keep fuel costs under control
Fuel cost control tips
Upgrading to vehicles with higher fuel efficiency can significantly reduce the volume of fuel required, hence reducing the impact of fuel duty on your fleet's overall fuel costs. It's worth upweighting fuel efficiency in your vehicle selection priorities and incentivising your drivers (especially ‘grey fleet’ drivers who may receive fuel expenses) to do the same.
Opting for vehicles powered by alternative fuels such as electric or hybrid can significantly reduce your fuel costs. This decision can also support your fleet’s sustainability goals and reduce maintenance costs.
Ensuring efficient route planning can considerably reduce your fleet's fuel consumption. Optimising routes to minimise travel distances and idling times is one way you and your drivers can achieve this.
By implementing systems to track fuel consumption for each vehicle in your fleet, you can easily identify areas where fuel usage can be minimised. Active fuel management can thus help reduce your overall fuel costs and lessen the impact of fuel duty.
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