Sympathy for the Petrol Station Owners?The price of fuel has increased so much over the last few years that filling up has become something that a lot of drivers have to consciously budget for. No one likes spending upwards of £60 on a tank of fuel but that is the stark reality.
The price of fuel has increased so much over the last few years that filling up has become something that a lot of drivers have to consciously budget for. No one likes spending upwards of £60 on a tank of fuel but that is the stark reality. Many motorists will actively seek out a garage offering lower fuel prices, perhaps at their local supermarket. Few drivers would ever spare a thought for the owners of the petrol stations. Surely, with fuel prices at these levels, they are making a fortune? In fact this is not always the case and rural stations in particular are facing tough times.
The Petrol Retailers Association (PRA) has pointed out that developments in the credit card industry are having a disastrous effect on some of their smaller, independent members. These are the garages that already face a tough time competing with the cheaper fuel offered by the likes of the big chains and supermarkets. These garages often provide a vital service, being located in rural areas where the big boys cannot see enough business to make it worth their while having a filling station. The credit card situation, however, is making things worse.
There has been a rise in the marketing of so-called 'premium' credit cards, which carry an annual charge but offer a range of benefits and reward points. What is less well known is that such cards charge the fuel retailer more than 2% of the total cost of each transaction. This might amount to around £3 on a typical £60 tank of fuel. For some petrol stations, that can be the difference between making a profit or a loss. Margins on fuel are so tight that £3 often is more than the profit the retailer makes on a tank of fuel.
Brian Madderson of the PRA commented: "More than 60 per cent of the price motorists pay is tax, but the credit card fee covers the whole amount. Why should card providers benefit from that? We should have a system similar to Germany where they have capped the total a card provider can pocket. These penal charges for card payments will cause serious issues for both independent retailers and their customers."
The number of rural filling stations has decreased from 6,000 to 2,000. The PRA has already asked the government to investigate credit card charges and cite a lack of regulation in the area. The Office of Fair Trading has also been asked to look at this aspect of the industry.
Posted by Edwin Miles on