SECTOR FOCUS: BUSINESS TRAVEL
Stablise costs by fuel hedging
C
ompanies are being advised to consider setting their fuel costs now as a strategy to minimise the possible impact of the
proposed fuel duty increase in August 2012. Experts at Yorkshire Bank say it is important for businesses of all sizes to stabilise their future fuel prices. Although the UK Government recently postponed
the proposed fuel duty increase of 3p per litre until August 2012, fuel prices continue to fluctuate and remain within touching distance of the all-time UK record high of 136.9p per litre set in May 2011.
‘Businesses should be taking this opportunity to review their fuel purchasing strategy and budget’
Data issued by the AA at the end of 2011 revealed the average price for a litre of unleaded fuel in the West Midlands is now 132p with diesel users facing an average price of 140.9p per litre. Should prices remain at or around this level into 2012 it could mean fuel prices approaching, if not exceeding, an all-time record high come August’s fuel duty increase.
National Express West Midlands and Centro have unveiled new state-of-the-art hybrid buses. The greener vehicles, which will run on two Birmimgham routes, will lessen the carbon footprint of the thousands of passengers they will carry. The 18 new buses are the result of a £5.2million investment into the future of low carbon and sustainable transport in the West Midlands, by National Express West Midlands, Centro and the Department for Transport Green Bus Fund. The buses will save an estimated
378 tonnes of carbon every year compared to regular buses, reducing C02 emissions of a regular bus by 30 per cent. Peter Coates, managing director of National Express West Midlands said: “Our new hybrids are really distinctive and a big investment into the future of transport in the region. “They have the latest on board
advancements in customer experience including audio visual technology to alert those with hearing and sight problems when their stop is approaching.” Gisela Stuart, MP for Birmingham
Edgbaston, said: "These vehicles are a massive investment by National Express West Midlands and Centro into the future shape of Birmingham's bus network. The new buses will be cleaner, greener and quieter than ever before.
However, businesses in Birmingham can prepare for
any fuel duty increase and fluctuating fuel prices by exercising a fuel hedging contract. Fuel hedging brings stability to a business’s fuel purchasing strategy, allowing prices to be fixed for a set period removing the element of uncertainty. Paul Reeves, managing partner at Yorkshire Bank’s Financial Solutions Centre in Temple Row, Birmingham, said: “Even businesses using just 50,000 litres of fuel a month should be looking at the security provided by hedging, particularly during times like these when speculation over fuel prices is intense. “Should the proposed duty increase go ahead in
August, a business with this level of fuel consumption would be facing additional costs of £1,500 per month. “Businesses should be taking this opportunity to
review their fuel purchasing strategy and budgets. Fuel hedging removes the guess work from budgeting and relieves worries about possible sharp increases in fuel prices affecting cash flow.” The hedged fuel prices relate to the daily rates
quoted by the Platt’s Index, which is a source of benchmark price assessments for commodities like fuel. This hedged price is agreed at the start of the partnership between the company and the bank.
All aboard the city’s hybrid buses!
Hidden price of
vehicle leasing The British Vehicle Rental and Leasing Association (BVRLA) is warning companies which use leased vehicles to beware of hidden costs. Lucy Ford from MintAuto
Bodyshop in Birmingham said unfortunately, it has become quite normal, for users of leased vehicles, to encounter a rather unexpected invoice, land on their desks, after they have finished using their leased vehicle(s). She said: “Many businesses choose to lease a vehicle to aid cash flow, and to have predictable costs, throughout the lease period. It is not known that there is often an unexpected bill, after the vehicle is returned, in the form of a ‘charge-back’. “BVRLA, the industry body, has
for a long time, issued Fair Wear and Tear Guidelines, which are designed to offer a framework for leasing companies to work within. The guidelines state which levels of damage are commensurate with a used, but cared for vehicle, and which items would be classed as neglect, misuse or even abuse.
‘It is definitely worth having your vehicle inspected, prior to handing it back, by an independent BVRLA approved inspector’
“Leasing companies are sometimes overzealous, in the type, and nature, of damage, that they are trying to reclaim costs against, from clients. It is definitely worth having your vehicle inspected, prior to handing it back, by an independent BVRLA approved inspector, who can advise which areas will need to be repaired and which are acceptable. This will keep the lease car user in control of their costs. “We see many cases where a
Gisela Stuart MP, Cllr Angus Adams and Peter Coates
vehicle is returned, without having minor damage repaired and the leasing company has raised a ‘charge back’ invoice, for many hundreds and often thousands of pounds. At this stage, there are very few options available to that user, and the leasing company invoice is usually paid.”
FEBRUARY 2012 CHAMBERLINK 45
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