When exploring different fuel cards, pricing is usually one of the first things that comes to mind. Unfortunately, fuel card companies don’t really make it easy to understand what exactly you’ll pay on every invoice. Some claim major discounts while others claim cost price pricing, but what will you really end up paying?
There are two basic fuel card pricing setups, retail pricing and OPIS plus pricing.
Retail Fuel Card Pricing
Retail fuel card pricing is exactly like is sounds. It’s the price you see at the pump when you are at a retail gas station or truck stops. If you are using a retail fuel card you will usually pay exactly the price at the pump plus or minus any fees or discounts.
The benefit of retail pricing is that you can choose the best price in the area by using tools like GasBuddy. On the same note, if you’re not actively training your drivers to choose the cheapest places, you could be losing money by not taking advantage of nearby locations with far cheaper pricing.
OPIS Plus Fuel Card Pricing
In the western United States there are locations called cardlock fuel stations that don’t actively post pricing because the pricing is based off of OPIS (oil price information services). “Plus” is the margin that the fuel card companies include on top of OPIS price to make money. These locations are part of one of two networks, Pacific Pride or CFN (Commercial Fueling Network).
Margins fluctuate from fuel card company to fuel card company within the network, but at the end of the day every location is based off of OPIS.
The benefit of OPIS plus fuel card pricing is that you don’t have to worry about drivers choosing locations because two cardlock locations within the same area will have very similar pricing because it’s based off of the same cost base, OPIS.
Discounts
You’ve probably already seen advertisements or received junk mail with fuel cards that offer discounts or rebates at the pump. Just make sure to read the fine print. Some cards only offer discounts at select locations that are already more expensive than your average gas station or truck stop. Other discounts are for limited time only or cap out at a certain number of gallons purchased.
So how do fuel card companies make money?
A typical fuel card company makes money on the small margin or rebate they earn from the merchant (gas station or truck stop). Fuel card companies drive companies to gas stations and in return are rewarded by the merchants for the business they are sending.
An additional source of revenue for a fleet card company is charging fees and interest. Examples include: invoice fees, membership fees, account maintenance fees, card replacement fees, transactions fees, etc.. Typically these fees are really minimal, but they add up over time.
So why is this important? Since fuel card companies make a small margin on every gallon, pricing is usually very similar no matter what fuel card you choose to use. It’s the fees and interest that really make the difference.