How fuel volatility is forcing Australian businesses to rethink mobility

“The focus has been on ensuring access to fuel wherever it’s available,” Mr Mulcaster said.

“We’ve had a lot of requests from customers to provide additional fuel cards, so drivers have more flexibility in terms of which petrol stations they can fill up at.”

Adjustments have also been made to fuel card daily limits and the types of petrol drivers can purchase on the cards.

“To manage exposure on those cards, there’s generally a daily limit. Now those limits are being exceeded with just normal fill-ups, so we’ve undertaken an extensive administration process with the fuel companies and customers to increase everyone’s limits to make sure we’re not leaving anybody exposed after they’ve filled up,” he said.

Fuel cards are also being adjusted to give users greater flexibility with the types of fuel they’re able to buy.

“Some petrol stations don’t have the exact fuel people need,” Mr Mulcaster said.

“Normally you would just have a fuel card that can only be used for E10, for example. We’re now changing that so you can buy anything up to premium unleaded to make sure you can still fill up to get home if there is no E10 available.”

Benefits of novated leasing

SG Fleet – a leading provider of fleet management, vehicle leasing, novated leasing, and mobility services – has also seen a large uptick in novated leasing activity in the last few months.

“Businesses have been quite concerned about the financial impacts on their employees’ cost of living, so we have seen more companies requesting the opportunity to offer novated leasing,” Mr Mulcaster said.

Novated leasing allows employees to buy a car and pay for its operating costs through a salary sacrifice program.

“Despite any fringe benefits tax (FBT) that may apply to the lease, purchasing a car through novated leasing is still more cost-effective than taking out a loan and buying a vehicle the normal way, and paying for all your running expenses through your post-tax dollars,” he said.

“The FBT savings for an eligible electric vehicle are even greater under a novated lease.”

Electric vehicle demand soars

The number of requests for electric vehicles (EVs) through the company’s novated leasing program has also risen sharply.

“The change in momentum for electric vehicles into novated programs has been pretty strong for the last two to three years,” Mr Mulcaster added. “Now, you add to that the issue in the Middle East and the demand has just gone crazy.”

Where previously the whole-of-life-cost of EVs was considered too high by many, a recent upturn in residual value is making the option more attractive to both businesses and individuals.

But the increased demand in EVs has meant buyers are now waiting four to six weeks to receive their cars, compared to seven days a couple of months ago. In response, more people are now considering purchasing used EVs instead.

“Traditionally, there haven’t been too many active buyers in the used electric vehicle market, but that’s changed quite dramatically,” he said.

“Having a good used market means it’s going to address some of the issues we’ve had with electric vehicles, being the whole-of-life costs.”

The right fit

Before swapping a petrol fleet to electric, businesses need to consider whether EVs are fit for purpose. If the vehicle needs to drive long distances or carry heavy loads, an EV may not be appropriate.

“But what has worked quite well to fulfil that requirement is hybrid vehicles – they don’t need charging, but their fuel efficiency is significantly better,” Mr Mulcaster said.

For businesses running utes with large fit-outs, diesel vehicles remain the only choice. In these instances, businesses need to consider how they can reduce fuel consumption instead.

“This may mean working with teams on reducing idle time, or asking if you need all those work crews and their vehicles on site,” he said.

“Could they have travelled together? Can we reduce some of the load they’re carrying (because weight has a big impact on fuel consumption)? It’s an ongoing process of working with the teams to try and remain as fuel-efficient as possible.”

Contact SG Fleet today to discover leading fleet management, salary packaging and novated leasing options across Australia.