This aviation blog post is part of a series on aviation fueling tips and tricks for business jet operators.
Planning fuel uplifts in advance is one of the best ways corporate operators can save money. Confirming credit in advance is particularly important – especially if you’re flying to a new or remote destination. Fuel taxes – and assorted fees – vary according to location. In some places, they can more than double the base jet fuel price. However, there are still ways to reduce fuel costs: For example, you can make strategic tech stops and qualify for fuel tax exemptions. It’s important to budget in advance for fuel and applicable taxes. One thing to note is that aircraft fuel quality today is uniform worldwide for the most part, and fuel shortages at locations are usually predictable – especially when you work with 3rd-party provider.
1. Figure out in advance how you’ll pay for jet fuel
Using a fuel card (also known as a fuel carnet) is the preferred method of payment for fuel. It is especially recommended at more remote locations. If you use one, we recommend you contact one of that company’s representatives in advance to inform him or her of the locations where you plan to uplift fuel in order for fuel releases to be sent to the respective fuelers. This ensures the fuelers will be notified of your arrival in advance. At certain locations, fuelers require that fuel releases be sent to them. For that reason, it’s also always a good idea to carry copies of fuel releases, especially to remote destinations. Be aware that consumer credit cards may not be accepted. If they are, you’ll likely pay full posted rates. Very rarely will fuelers demand cash. In most cases, arrangement of some sort of credit with fuel suppliers is possible, given adequate notice, even in the most remote locations. One easy tool you can use to get fuel pricing is to request a jet fuel price estimate online from the UVair Fuel Program.
2. Determine advance notice requirements for your jet fuel uplifts
Some locations request 24-72 hours’ advance notice. This is generally a supplier requirement due to possible shortages or in case fuelers do not receive requests on time. Your 3rd-party provider can advise if advance notice requirements are negotiable.
3. Evaluate benefits of fueling your aircraft on arrival
Fueling your aircraft on arrival is an option to consider if you are scheduled to depart from a location during a very busy period, or if fuel shortages are anticipated. For example, there may be fueling delays at locations in India during periods of busy airline activity, or on departure from Zurich, Switzerland (LSZH) on the final day of the Davos World Economic Forum. There may also be fuel shortages at Nice, France (LFMN) on weekends. In such cases, fueling on arrival may help eliminate the risk of fuel delays on departure.
4. Factor in fuel taxes and airport fees
A 3rd-party provider can help you plan for the best fuel stops based on applicable taxes and opportunities for tax exemptions. Fuelers in different parts of the world charge their own taxes and fees. The most expensive locations are typically in Europe, where Value Added Taxes (VAT) and excise duties (also known as “Mineral Oil Taxes” [MOT]) often apply. Every airport worldwide has mandatory fueling fees. Usually, you’ll also pay a ‘hook up’ or delivery fee. “Into-plane” or delivery/hydrant fees may run $0.20 per gallon in Europe. Service fees in Spain can differ depending on if you fuel under or over wing. When flying domestic legs, you may be subject to additional taxes. In India, for example, you’ll be charged for any jet fuel that you’ve tankered if your next leg is domestic. On the other hand, if you fuel for an international leg while in India, there is no sales tax. When comparing fuel vendors and quotes, consider all applicable taxes and fees and be aware of worst-case cost scenarios at various locations. Do ensure that the prices from various providers you compare are equivalent, as some vendors may include VAT – along with other taxes and fees – in their quotes. Others may include only the base fuel price or a limited number of applicable taxes.
5. Understand VAT and excise duties and where they apply
VAT in Europe ranges from 9% to more than 20%, depending on location. The VAT applies to the base fuel price, as well as additional fuel taxes and fees. The goods and services tax is similar to the VAT and may be charged in Australia, Canada and parts of Asia. Excise duties (MOT) – a tax almost exclusive to Europe – begins from $1.50 per gallon depending on the country and/or airport of uplift, but will add several dollars per gallon to the base fuel price at some locations. At Munich, Germany (EDDM), the Posted Airport Price was recently $4.73 per gallon – plus a $3.42 per gallon MOT, a $0.21 per gallon hydrant fee and a 19% VAT on all charges. While there are fuel taxes to consider in regions like Europe, there are tax exemptions operators may be able to take advantage of. In addition – and with the assistance of a dedicated fuel professional – you can plan your fuel purchases per country/location to know where to minimize or maximize your uplifts to save the most money. It’s also recommended that you work with a fuel program to assist with VAT exemptions.
Plan fuel purchases ahead of your trip – with fuel quotes for every stop. Also be aware of all charges – including taxes, delivery fees and airport fuel charges – so that fuel quotes can be compared accurately.
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See our next installment in this series on jet fuel covering VAT taxes and recovery.
Category : Best Practice
About Steve Woods
Steve Woods is an expert on aviation fuel and taxes and fees related to Jet-A1 uplifts. He currently serves as director, Sales and Supply, Europe, Middle East &Africa, UVair, and has more than 15 years’ experience with Universal. Prior to joining the UVair Fuel team, Steve, a native of the United Kingdom, served in positions in both Trip Support Services and ground handling at Universal, lending him a breadth of knowledge of all areas of flight operations. One of Steve’s specialties is his understanding of the complicated and varying differences by country of value-added taxes throughout Europe, as he played an integral role in launching the UVair European Fuel Services Limited in 2009. Steve can be reached at firstname.lastname@example.org.
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