LAST UPDATED 19th May 2023

How Construction Businesses Can Reduce the Impact of Record-High Fuel Prices

For the first time since COVID-19 hit Australian shores, the pandemic is not the biggest pressure facing construction companies.  Fuel prices have taken the crown.  The cost of fuel plays a major role in your company’s bottom line profits. The more vehicles you have on the road, the more your bottom line is at the […]

7 MIN.

For the first time since COVID-19 hit Australian shores, the pandemic is not the biggest pressure facing construction companies. 

Fuel prices have taken the crown. 

The cost of fuel plays a major role in your company’s bottom line profits. The more vehicles you have on the road, the more your bottom line is at the mercy of the pump price. 

So what can you do about it?

In this article, we explore the impact of fuel costs on construction companies, and five actions you can take to reduce the pressure:


The impact of fuel prices on construction businesses

Petrol and diesel prices have been rising at their fastest pace in years, and, in 2022, construction businesses are feeling the pinch at the pump. 

February prices in Australia’s five largest cities rose to an eight-year high, according to the Australian Competition and Consumer Commission’s (ACCC) petrol monitoring report.

The average price of petrol across Australia at the end of March was 206.7 cents per litre – 50 cents more than the average of 159.3 cents in the past 12 months – according to the Australian Institute of Petroleum (AIP) .

Combined with rising materials costs, data from CoreLogic shows that in the 12 months to March 2022, construction costs increased by a staggering 9%.

This has impacted construction companies of all sizes. More than half (56%) of building and construction SMEs are under extreme pressure due to the spike in fuel costs compared to 41% of SMEs in general according to MYOB Business Monitor. 

Meanwhile, civil contractors recently said they are at “breaking point” due to soaring materials and fuel prices. 

Some good news came on 29 March with the Federal Budget 2022 announcement of a 50% cut in the fuel excise of 22 cents in the litre. The temporary fuel excise cut provides some relief for builders and tradies, however it is only expected to remain in place for six months. 

The good news is there are steps construction companies can take to alleviate the pressure of soaring fuel costs.


5 actions to reduce the impact of fuel costs

Claim fuel discounts 

The first and most simple way to save money on fuel is to claim discounts at the pump. There are lots of ways to do this, but the most sustainable way is with fleet cards for your business.

Depending on the brand, a fleet card, aka fuel card, offers you savings at the pump. So every time your drivers fill up at the pump, your business is saving money, which directly affects your bottom line. 

Eliminate fuel fraud 

Fuel fraud is the last thing you want to worry about when fuel costs are high. Fuel cards can help you reduce the instances of fuel fraud by setting controls and limits on drivers. 

For example, Fleet Card lets you limit the fuel amount by setting a maximum amount of fuel a driver can purchase each day with the fuel card. This means you are giving your drivers enough to fill up the business tank without any room for extra “personal” fuel.

Similarly, you can limit the number of daily fueling trips a driver can make. This also helps prevent fuel theft from outside the company. For example, if a driver refuelled and then accidentally lost the card, a thief wouldn’t be able to use the card to refuel on the same day.

Businesses identifying and combating fuel fraud.

Learn more ways you can reduce fuel fraud.  

Save time on admin

Time is money. Every minute that you or your team spends on micro-managing vehicle fuel and maintenance costs is time that could be spent serving your customers and growing your business. 

With a fuel card, you can easily track, manage, and control fuel expenses across multiple vehicles and drivers. Your fleet manager or accounts team can see details of each transaction, which makes expense management and reporting a breeze. 

Keep your fleet maintained 

Make sure you maintain your fleet so they are running with the best fuel efficiency and you aren’t at risk of unexpected breakdowns, which can not only cost you in repairs, but in billable time too.

Simple checks can make a big difference on fuel costs. For example, using the right grade of motor oil can improve lifespan and fuel economy.

Check whether your fuel card offers discounts on fuel related expenses. For example, Fleet Card offers partner discounts across tyres, glass, servicing, and more.

Fleet manager completing routine service checklist for a business fleet of vehicles.

Optimise driver routes

Efficient route planning is another smart way to reduce fuel costs. 

Use software tools that can help your drivers find the fastest possible route for every job. For example, Verizon Connect can use information such as location, fuel economy, traffic and even weather conditions to schedule routes so drivers reach jobs fast, with minimal fuel consumption. 

Plus, when you choose a fuel card that is accepted at more than 90% of fuel stations nationwide, like Fleet Card, you can be sure your drivers can fill up wherever the route takes them.  

Verizon Connect route optimisation and planning software


Over to you 

With fuel costs becoming the number one challenge for business across Australia, it’s critical for construction companies to put strategies in place to manage and save costs in the long term. 

Talk to one of our friendly advisors to find out the right Fleet Card for your business.  

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