With pump prices soaring in the wake of conflict in the Middle East, council fleet budgets are under mounting pressure. But are the events of recent months a crisis to be managed – or a catalyst for change? LAPV speaks to [Zemo] about what the numbers say and what fleet managers can do now.
The theft of 12,000 litres of diesel – worth at least £20,000 – from a Leeds City Council depot in the early hours of 22 March was a vivid illustration of just how valuable fuel has become. A smaller theft at a separate Leeds depot followed shortly afterwards. Both incidents took place against a backdrop of sustained conflict in the Middle East, which has disrupted the flow of oil and liquefied natural gas through the Strait of Hormuz and driven fuel prices sharply upward across the UK.
For council fleet managers already working with tight budgets and stretched teams, the timing could hardly be worse. A survey conducted by the Association for Public Service Excellence (APSE) found that just over a quarter of respondents considered the impact of recent fuel price increases on their authority to be ‘very significant’, while a third said they were ‘very concerned’ about the potential impact on fleet operations. Just under half had a business continuity plan in place to deal with potential supply disruptions – with most of the remainder in the process of developing one.
The picture that emerges is of a sector absorbing significant cost pressure, largely without changing course. Around three quarters of APSE survey respondents said the fuel price situation had produced ‘no change’ in their fleet decarbonisation plans. Just under two thirds said it had not led them to implement fuel efficiency measures more vigorously. The immediate pain is being felt, but the strategic response has yet to follow.
The electrification imperative
That may need to change – and quickly. According to Zemo Partnership, the organisation that works with government and industry on transport decarbonisation, the total cost of ownership (TCO) case for fleet electrification was already compelling before the latest price spike. The cost of new electric cars is now at or near parity with their internal combustion engine equivalents, and the business case has only strengthened as diesel and petrol prices have climbed.
‘The rapid increase in fuel costs makes the TCO case for fleet electrification even more compelling,’ says Zemo. ‘Many fleets will already have had ambitious decarbonisation plans and may not yet have had the opportunity to review them – strategic fleet reviews generally take place over a longer timescale. When those reviews occur, we would expect the recent fuel price increases and the threat of further volatility to strengthen resolve and, where there is scope to do so, accelerate electrification.’
There are signs that the wider market is already responding. BEV sales rose 59% in April compared with the same month the previous year, reaching a record market share of 26.2% according to SMMT data – a strong signal that fleet operators outside local government are acting on the changed economics.
Barriers that remain real
For councils, of course, the picture is more complicated. Capital spending constraints, grid capacity limitations and the practical challenges of depot charging infrastructure all create genuine friction – and Zemo is candid about this. Grid connection queues can be a serious issue for fleets requiring depot charging, and fleet managers are advised to prepare plans well in advance of need. Where employees must rely on public charging rather than charging at home, running cost savings are considerably reduced and practical arrangements can be difficult.
The commercial vehicle market also presents specific challenges. There remains limited choice in certain categories – large cage transits, minibuses – that many council fleets depend on, though the range of available vehicles is improving steadily.
Despite these constraints, the direction of travel is clear, and the tools to support it are more accessible than many fleet managers may realise.
Funding mechanisms worth knowing
Several schemes are currently available that councils may not be fully using. The Depot Charging Scheme part-funds the installation of charging infrastructure at fleet depots, covering 70% of chargepoint and civil costs up to £1 million across all sites – with a first application window running to the end of June 2026. The Workplace Charging Scheme, extended to March 2027, provides public sector organisations with 75% of installation costs for up to 40 sockets per applicant. The Plug-in Car, Van and Truck Grants support direct vehicle purchase, while the Local Electric Vehicle Infrastructure (LEVI) Fund enables on-street charging installation.
For capital borrowing, Zemo points to the Public Works Loan Board, Salix Finance and Community Municipal Bonds as low-cost routes that are underused in the fleet context. Councils with outsourced services such as refuse collection may also be able to accelerate overall fleet electrification indirectly – by requiring it of contractors.
The cost of inaction
The Leeds thefts are a reminder that high fuel prices create secondary risks beyond the budget line – including physical security threats at council depots that were barely on the radar a year ago. For fleet managers making the case internally for faster transition, the current climate offers more ammunition than ever before.
As Zemo puts it: ‘Where councils are not already working flat-out to achieve decarbonisation, the business case for accelerating electrification will be even more compelling and may persuade budget holders to reallocate scarce resources in this direction.’
The fuel price crisis will eventually ease. The structural case for electrification will not.
Photo: © engin akyurt
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