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Summary: A fuel surcharge is the additional cost that is added to the total bill of purchasing fuel at a gas station. Learn how it's calculated, who bears the cost, and strategies to avoid it.
Credit Cards have made online transactions extremely convenient by offering quick funds and providing numerous offers and discounts on shopping, lifestyle, travel, and even fuel purchases. However, while purchasing fuel, especially with a Credit Card, knowing the aspect of fuel surcharge becomes important. This additional fee often raises questions: How is it calculated? Who bears the cost? In this article, you will get an insight in the calculation of fuel surcharge, who bears the cost, and ways in which you can mitigate the extra charges with a suitable fuel Credit Card.
Fuel surcharge is an additional fee imposed on transactions involving the purchase of fuel, particularly when a payment is made via Credit Cards. It serves as a mechanism to offset the fluctuations in fuel prices. While initially introduced by airlines to manage fuel costs, its application has extended to other sectors, including the petroleum industry.
By understanding how fuel surcharges are calculated and making informed choices, you can avoid fuel surcharges payments and save more on your Credit Card.
The calculation of fuel surcharge typically involves a percentage of the total transaction amount. For instance, if the fuel surcharge rate is 2.5% and the transaction amount is ₹5000, the surcharge would be ₹125 (5000 * 0.025). This additional cost contributes to the overall expenses borne by consumers when purchasing fuel.
Consider a fuel purchase of ₹5000. If the fuel surcharge rate is 2.5%, the calculation would be as follows:
Fuel Surcharge = Total Transaction Amount * Surcharge Rate = ₹5000 * 0.025 = ₹125
Thus, the fuel surcharge for this transaction would be ₹125.
The responsibility of paying fuel surcharges falls upon the consumer making the fuel purchase. Whether the transaction occurs at petrol stations or via online platforms, the surcharge is included in the final amount payable by the cardholder.
The responsibility of paying fuel surcharges falls upon the consumer making the fuel purchase. Whether the transaction occurs at petrol stations or via online platforms, the surcharge is included in the final amount payable by the cardholder.
While fuel surcharges may seem inevitable, there are strategies to minimise or bypass them:
Some fuel companies offer loyalty or discount cards that provide reduced fuel prices or waive surcharges for cardholders.
Specialised fuel Credit Cards, such as the HPCL Credit Card from IDFC FIRST Bank, often offer perks like fuel surcharge waivers or cashback on fuel purchases, making them a cost-effective option for frequent drivers. Applying for a fuel Credit Card can offer you better savings in the long run, providing surcharge waiver and exclusive benefits.
A fuel surcharge waiver on Credit Card is a benefit extended to cardholders, exempting them from paying surcharges on fuel transactions. This feature is particularly prevalent in fuel Credit Cards, designed to incentivise customers and enhance their overall experience.
The FIRST Power+ Credit Card, collaborated with HPCL (Hindustan Petroleum Corporation Limited), presents an advantageous solution if you are seeking to mitigate fuel surcharges. This HPCL Credit Card provides attractive savings of up to 6.5% on fuel purchases saving you up to ₹18,500 annually which is enough to buy 175+ litres of fuel. Additionally, you get 5% savings on grocery, utility expenses, and IDFC FIRST FASTag recharges. As a welcome benefit, you get ₹500 cashback on the first transaction of ₹500 and above and up to 50% discounts on international car rentals.
What’s more? You get complimentary access to domestic airport lounges once every quarter, a personal accident cover of up to ₹2,00,000 and lost card liability of ₹25000.
By leveraging the FIRST Power+ Credit Card, you can enjoy the convenience of cashless transactions while maximising savings on fuel expenditures. The card's additional benefits, such as reward points and exclusive offers, add further value to the overall features, making it a preferred choice for your dynamic needs.
Understanding various aspects of fuel surcharge is crucial for you while purchasing fuel, particularly with a Credit Card. While fuel surcharges represent an additional cost burden, as a smart consumer, you can employ various strategies to mitigate their impact. Whether through fuel discount cards, or specialised fuel Credit Cards like the FIRST Power+, you have the means to optimise your fuel expenditure while enjoying additional perks and benefits.
Disclaimer
The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.
The features, benefits and offers mentioned in the article are applicable as on the day of publication of this blog and is subject to change without notice. The contents herein are also subject to other product specific terms and conditions and any third party terms and conditions, as applicable. Please refer our website www.idfcfirstbank.com for latest updates.