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Fleets risking fuel ‘double whammy’ from diesel switch

Fleets are being warned of a fuel cost ‘double whammy’ as a result of rising fuel prices and ongoing migration away from diesels.

The last time UK fuel prices were on this trajectory was in 2011, but fleets were still shifting to diesels and seeing a steady improvement in mpgs

The warning comes from mileage and expenses management specialist TMC as it highlights its own data showing that the real cost gap between diesel and petrol is much wider than many people realise.

TMC analysed real-world fuel consumption data for 7,000 fleet cars last autumn. The results showed that the diesels were on average 38% more efficient than petrol equivalents.

Even allowing for the fact that petrol is still cheaper at the pumps, the data showed that diesel drivers spent 30% less per mile on fuel than drivers of petrol versions of the same cars. Diesels also retained their cost advantage for the employer over petrol in nearly every case when BiK and NICs are factored-in, despite the 4% BiK surcharge.

Yet latest SMMT figures show that fleets are continuing to switch to petrol models. New car data for fleets in April shows that diesel accounted for 39.1% of registrations, with petrol taking 54.4% and alternatively fuelled vehicles (AFVs) covering 6.4%. This compares to 41.3%, 53.7% and 5.0% respectively in March.

With fuel prices in the UK now at their highest level for three and a half years – official UK Government average retail fuel price figures released on 22 May show diesel averaging £1.30 per litre across the country and petrol £1.26 – TMC said fleets’ switch away from diesel in favour of thirstier petrol cars could not be happening at a worse time.

Managing director Paul Hollick commented: “We urge fleets and drivers to look carefully at the cost implications of their fuel choices. It’s understandable that business drivers want to choose petrol in the present climate of opinion but the real-world costs of their choice may come as a shock to them and their company.”

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Natalie Middleton

Natalie has worked as a fleet journalist for 16 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.