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What Brexit means for fleet operators

Jun 29, 2016
The vote has been counted, the UK will be leaving the EU and this has a range of implications for anyone managing vehicles.
With the poll being split 52/48 and representing a clear mandate for the government, long-term changes are inevitable. Here, Steve Clarke, Group Marketing Manager at Fuel Card Services, reviews how Brexit could impact fleet managers.
Steve Clarke, The Fuelcard People 

Although only 6% of British firms trade with the EU, the immediate impact and enduring consequences will affect everyone. Fleets can expect interesting times ahead and it is hard to see how fleet managers should prepare. Right now, it could be worth watching for signs of panic-selling by nervous suppliers facing short-term stakeholder pressures. Those with funds available for investment may be able to find some real bargains.

At any time of economic difficulty, there are suppliers who cave in to short-term pressures, which means good deals for their customers. This is as true in the fleet market as anywhere else. In reality, Britain will remain within the EU for at least the next two years, but probably rather longer. David Cameron is unwilling to trigger Lisbon’s Article 50 during his remaining months in office. Even if his successor acts immediately, the 27 other EU members are all opposed to our departure and each one has the power to delay the exit process for years.

Sterling’s fall effectively raises UK prices for fuel which will be reflected at the pumps in the coming days and weeks, with a rise of 2p per litre likely. However, the exchange rate is not the only factor influencing pump prices. The Chancellor threatened an immediate 'emergency budget' to include increased fuel duty. Whilst this is unlikely to happen, if Osborne remains in Number 11 until November, fuel duty may be addressed in the Autumn Statement.

It also hits anything else sourced from overseas and there may have to be temporary duty and tax rises. In the mid- to long-term, history shows that markets always stabilise. The key difference between the current exchange rate crisis and any previous difficulty is that this one was anticipated. 

Although the referendum result is clear, there remains a great deal of uncertainty. We know only that change is inevitable, without having a timescale. Britain will look the same next week as it did yesterday, but it may be a very different place in a few years’ time. All that we can do is to watch, analyse and make the best practice recommendations that will most help our customers.

Photo: Steve Clarke, Group Marketing Manager, Fuel Card Services.

 

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