Understanding the difference between commercial and retail pricing for fuel, you’re new to fuel and fuel cards or just need a new year refresher.
There are two pricing options to choose from when you use a fuel card: commercial or retail pricing.
Commercial pricing is also known as fixed pricing and sometimes as the bulk or bunker price. All these terms mean the same thing – a price that is fixed, usually on a weekly basis. A commercially priced fuel card gives you access to wholesale prices, which means that wherever your drivers fill up you know exactly what price they will be paying – something that can be a help if you have a large commercial fleet that’s geographically spread across the UK, enabling you to plan and forecast your spend without the worry of regional price fluctuations.
The other option is retail or pump pricing. This simply means the price you pay is the price you see on the pump. When you take a fuel card with retail pricing the benefits are more wide ranging, from convenience to access to special offers and additional services. For example, our Allstar One card offers discounts on diesel when using the card to pay for fuel at selected sites.
So, how do the two compare? What are the benefits and drawbacks of these?
CommercialPros
Great for hauliers and high mileage businesses, especially those using diesel
Certainty of fixed pricing, set on a weekly tariff
No need to instruct and rely on drivers refuelling habits to guarantee cheap rates
Benefit if the price of fuel increases while your price is fixed
Cost effective solution for companies purchasing large volumes of fuel
Cons
Fewer sites at which you can refuel
Lose out if the price of fuel declines while your price is fixed
RetailPros
Suitable for all types of business
Save money through special offers, garage/retailer loyalty schemes and competitive pump prices
Access to an extensive network of refuelling sites
Benefit from regional variances and market fluctuations to gain access to cheaper fuel than available with ‘fixed’ deals
Cons
Prices will fluctuate on a daily basis, and will be subject to geographical differences
Which pricing is right for your business?
To work out the right fuel card for your business you first need to decide which pricing structure will best suit your business. You should think about:
How many miles or litres of fuel your fleet uses? Fixed pricing will be best suited to high mileage companies who need certainty over pricing.
What fuel type does most of your fleet use? Those with large numbers of diesel vehicles will benefit most.
How important is network coverage to you? Retail priced fuel cards offer access to much larger networks of fuelling sites, providing convenience, minimising route deviation and enabling access to supermarket sites where loyalty points can be collected.
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