Following the impact of the pandemic, the UK’s businesses are now buying fuel at near enough pre-pandemic levels. Paul Holland, managing drector for UK fuel at Allstar Business Solutions, looks at the key fuel usage trends that have emerged in specific sectors over the last year and gives his key predictions as the adoption of alternative fuels rise and we enter the ‘new normal’.

Paul Holland, managing drector for UK fuel at Allstar Business Solutions

All businesses across the country have been impacted in some shape or form over the last two years, whether that be supply chain issues, fluctuating demand, or being forced to close due to lockdown restrictions.

Every time a driver delivers goods to a customer or uses a company car, new data touchpoints are created as they increase mileage, pay for fuel, or pay for parking. By gathering this data, we are able to capture the UK’s commercial fleets usage over the course of 2021.

Overall, we discovered that fuel purchase rates for UK businesses are now up to pre-pandemic levels. Of course, there are other indicators of the country’s economy, however, on its own, fuel use would indicate that business is now back to usual for many companies.

Outperforming 2020

Starting at a high level, we’ve clearly seen a major dip in the total miles travelled by businesses across all types of fuel (diesel, petrol, and alternative fuels) at the beginning of March of 2020, before bottoming out in April. It took until July to recover, although remained lower than levels at the start of 2020 by an estimated 10-20 million miles.

With expected dips in December of 2020 and 2021, total miles travelled has remained steady at pre-pandemic levels from the end of 2020 through all of last year, with this expected to continue as we move through this year.

Month-to-month mileage increases

If we look at monthly averages by industry, we can compare the significant differences in travel between 2020 and 2021. In certain sectors fuel usage increased by as much as 70% over the previous 2020 average, and that aside from a drop in the education sector during the summer holidays, every sector bar one has increased their fuel use. Experiencing a turbulent year, the utilities sector is the exception, and since September 2021, more than 20 utility companies in the UK collapsed due to soaring wholesale prices.

Some sectors did particularly well – real estate consistently showed 30-40% increases in 2021 compared to the year before. Additionally, although it started the year down compared to 2020, the hospitality and catering sector showed recovery in April and by the middle of the year was also matching real estate growth.

Whilst experiencing a smaller rise – due to not being impacted as strongly – manufacturing and logistics both outperformed 2020 by around 5-10%. However, the transport and storage industry proved to be extremely resilient, barely registering the lockdown-related dip in April of 2020 and quickly recovered to pre-pandemic levels.

Focusing on the key industries

If we look at the complete picture for specific sectors, then a few key trends emerge:

Manufacturing: Representing around 10% of the total miles travelled by our customers and acting as a base for many other sectors, the manufacturing industry is as close to representing the rest of the UK’s industry. As with fuel use in general, the dip and return to normal, continued throughout 2021 for manufacturing. We also see that while diesel use remains steady, petrol use is rising, indicating that companies are replacing with less environmentally damaging diesel-fuelled vehicles with more sustainable alternatives.

Transportation and storage: While the logistics industry was heavily talked about in 2021 due to driver shortages and international border queues, fuel usage does not coincide with these negative events. Instead, fuel use rose slightly in 2021, particularly in diesel, which exceeded pre-lockdown levels and remains on the rise.

An increase in alternative fuels

While petrol and diesel returned to pre-lockdown levels, the growth of alternative fuels and particularly electric vehicles has risen dramatically. There has been a steady increase in usage which is expected to continue over the coming years with the cut-off for the sale of new fossil fuel driven vehicles just eight years away.

The year ahead

Even though the Government has now announced the end to all restrictions, the recent Omnicom variant showed the world that we can’t expect the pandemic to immediately go away nor that some form of impact couldn’t happen again in the future. But while UK’s fleets should remain alert, business operations are returning to normal, as the data shows that their fuel usage is largely back to pre-pandemic levels. Avoiding any further barriers, we are set for a steady increase in activity throughout the year.