Offset Price Hikes from Removal of Red Diesel With Telematics

The date of 1st April 2022 loomed over the UK construction sector like a dark cloud. The day it became illegal to fill vehicle and machinery tanks in the UK with red diesel, leaving businesses faced with a fuel duty bill five times higher overnight.

In short, the government hopes by restricting the use of red diesel, the construction sector will be pressured to source and invest in cleaner alternatives. Some firms have already announced they will be switching to alternatives such as hydrotreated vegetable oil (HVO) and Shell GTL. There are also talks of the widespread introduction of Biomethane HGV refuelling stations. Another consequence of increased volumes of white diesel on construction sites is fuel theft.

More than ever, construction and hire businesses should be exploring the world of technology on offer. The right telematics system gives increased visibility over fuel costs, operational processes and criminal activity.

The ability to plan routes more strategically improves fuel management. Greater visibility results in increased efficiency and less fuel being used unnecessarily on trips. It also has a positive impact on customer service, with the ability to provide accurate details on arrival and collection times through live map data. While fuel costs are rising, it’s possible to reduce insurance costs by using a telematics system. With plant and equipment hire it’s crucial to accurately bill for the correct usage. AMI Nexis provides this functionality, allowing for better servicing and maintenance planning, and so reducing unexpected downtime.

In 2020 the cost of theft and vandalism in construction sat at £800 million. Rising prices in the industry have led to predictions that crime rates, and the knock-on financial impact, will increase further in 2022.
Geofencing and live positional data on vehicles, plant and tools offer accurate and real-time data, helping theft prevention and vastly improving rates of recovery.

Unfortunately, there is no hiding from the cost implications that come with paying higher duty on red diesel. However, as demonstrated above, there are a number of areas where telematics delivers a return on investment across the business, improving operational efficiency and resulting in some real short and long term savings for a business.