18 February 2022
Analysis of fuel receipts by Allstar shows companies are getting back on the road again, with 600 million more business miles driven in 2021 than 2020.
It’s unlikely that there’s been a single business that hasn’t been impacted at least in some way by the last two years, from supply chain issues to wildly fluctuating demand, or being forced to close their doors for months on end due to lockdown restrictions.
As drivers deliver goods to a customer or use a company car to get to a meeting for example, they create data touchpoints every time they rack up mileage or pay for fuel or put money in a parking meter. At Allstar Business Solutions, we are able to harness such data to take the pulse of the UK’s fleets.
Every time somebody uses one of our cards, we know that it is to fuel a delivery vehicle taking goods to customers or a company car heading to a client meeting. In other words, the data our customers produce is a measure of the general level of economic activity in the UK.
The bottom line from our findings is that the UK’s businesses are now buying fuel at pre-pandemic levels. While there are other indicators of the country’s economy, taken alone, fuel use would seem to indicate that it’s back to business as usual for many companies.
Let’s look closer at some of the key statistics to get a better sense of what is happening:
2020 vs 2021
By comparing data from both years, we’ve clearly seen a major dip in the total miles travelled by all types of fuel (diesel, petrol, and alternative fuels) that began in March of 2020. It bottomed out in April and took until July to recover, though it remains below that year’s January, February and March levels by an estimated 10-20 million miles.
From July 2020, fuel consumption appeared to even out, before crossing the billion miles threshold in September 2020. There are the expected dips in December of both years, but otherwise it has remained steady at pre-pandemic levels from the end of 2020 through all of last year, and there seems to be no reason to believe that will change as we’re now moving through 2022.
Month by month increases
We can see just how significant the difference in travel between 2020 and 2021 was by looking at monthly averages by industry. Some sectors increased their fuel use by as much as 70% over the previous 2020 average, and that aside from a predictable drop in fuel use in the education sector during the August school holidays, every sector apart from one has increased their fuel use. The exception to this is the utilities sector, which had a tumultuous year - since September 2021, more than 20 utility companies in the UK collapsed due to soaring wholesale prices.
Some sectors did particularly well: real estate consistently showed 30-40% increases in 2021 compared to the year before, as did education which took its annual decrease in activity in August. Though it started the year down versus 2020, the hospitality and catering sector began to recover in April and by the middle of the year was also showing growth of 30-40%.
Other industries showed more modest growth – manufacturing and logistics both outperformed 2020 by around 5-10%, and we can put this down to their sectors being less affected by the previous year’s lockdown. In short, they didn’t rise as much in 2021 because they didn’t fall as deeply in 2020.
The transport and storage industry proved to be extremely resilient, barely registering the lockdown-related dip in April of 2020 and quickly recovering to pre-pandemic levels.
The view from key industries
If we look at the complete picture for specific sectors, then a few key trends emerge:
Manufacturing: Representing around 10% of the total miles travelled by our customers and the base on which other industries like logistics and retail rest, the manufacturing industry is as close to emblematic of the rest of the UK’s industry as one sector can get.
As with fuel use in general, we see the expected dip and return to normal for the manufacturing industry that continues throughout 2021. We also see that while diesel use remains steady, petrol use is rising, which could indicate that companies are replacing diesel-fuelled vehicles with more efficient vans as part of a general push towards cost savings following the pandemic.
Transportation and storage: The logistics industry has been in the headlines throughout 2021 because of driver shortages and long lines at international borders, but its fuel usage doesn’t paint a picture of an industry that is facing difficulties. Rather than holding steady, overall fuel use rose slightly over the course of 2021, particularly when it comes to diesel, which managed to exceed pre-lockdown levels and is continuing to rise.
Alternative fuels are still charging ahead
While petrol and diesel returned to pre-lockdown levels, the use of alternative fuels, especially the growth in electric vehicles, has risen dramatically. At Allstar Business Solutions, we are seeing a steady increase in usage and expect it to continue to grow over the coming years - with the cut-off for the sale of new fossil-fuel driven vehicles just eight years away, the day will come when it eclipses petrol, then diesel.
What will happen in 2022?
The emergence of the Omicron variant during the festive period showed the world that we can’t expect the pandemic and the ever-present threat of lockdowns to immediately go away, although all signs point to vast improvements. That doesn’t mean, however, that for the UK’s fleets it’s not business as usual as the data shows that their fuel usage is largely back to pre-pandemic levels. Businesses have definitively reached a ‘new normal’ and, barring any exogenous events, we are set for a slow and steady increase in activity throughout 2022.