Harrow Council's Cabinet has approved a two-year extension to its fuel card services contract, with an approximate uplift of 10% to the overall contract value, equating to around £628,000. The extension will run from May 2027 to April 2029.
The decision was made during a Cabinet meeting on Thursday, July 9, 2026. Councillor Pritesh Patel, Portfolio Holder for Cleaner Streets and Public Safety, explained that the extension is necessary to reflect current market conditions and ensure the contract remains financially viable amidst volatile fuel prices. He specifically mentioned ongoing instability in the Middle East which is continuing to put upward pressure on prices.
This extension is not due to increased usage but to maintain financial viability.
The fuel card services contract, which began in May 2022, has been described as providing a reliable and cost-effective method for purchasing fuel, essential for the council's frontline services including waste collection, street cleansing, transport, and grounds maintenance. Councillor Patel stated that The contract has performed well since it started in May 2022 and provides a reliable and cost-effective way of purchasing fuel which is essential to keep some of our frontline services running.
The pricing model is linked to the wholesale fuel benchmarked Platts index pricing mechanism, with a fixed supply margin, allowing the council to secure fuel rates below standard forecourt prices. The two-year extension includes a 10% uplift in the overall contract value, which equates to around £628,000 pounds.
While annual expenditure has largely remained in line with the original estimate of approximately £897,000 per year, the period of 2022-23 saw a significant increase in fuel costs due to shortages and market disruption. This, coupled with ongoing global fuel market volatility, has led to a projected shortfall of around £380,000 for the financial year 2026/27. Councillor Patel noted that Annual expenditure has exceeded the original projected £897,000 identified when the contract was established. This increase was primarily driven by the fuel shortage experienced during 2022-23, which resulted in annual expenditure reaching £1,116,019.72. In addition, whilst fuel prices have remained stable for the last 3 years, recent continued volatility within the fuel market caused by the situation in the middle east has further contributed to an overall projected shortfall of around £380,000 for 2026/27.
Extending the contract will ensure continuity of fuel supply, prevent disruptions to critical services, and maintain a stable arrangement during uncertain market conditions. Alternative options, such as re-procuring the contract at this stage, were considered but deemed to carry higher risks of price increases and potential service disruption. Councillor Patel stated that alternative options have been considered however reprecurring at this stage would carry a higher risk of prices and potential service disruption and doing nothing would leave the contract underfunded and unable to meet demand.
More information on the Cabinet meeting can be found in the Printed minutes and the Public reports pack.