Can digitalisation help the oil and gas industry survive the latest employer national insurance hikes?

Businesses in the fuel industry are reeling at the latest tax changes to Employer National Insurance Contributions (NICS). From April 2025, payroll taxes increased from 13.8% to 15%. Along with this change, is a reduction in the salary threshold at which Employer NICs is payable. Now a salary of £5,000 upwards commands employer NICs, whereas it was £9,100. There are also adjustments to the minimum wage to factor into salary calculations.

In its summary of the impact this will have on the sector, Fuel and Oil News remarked that this would cause distributors to make more difficult decisions. Reducing drivers’ hours is already a common approach to managing overheads, but there’s the potential that jobs could go completely. Not to mention, the likelihood that hiring freezes could come into force as businesses try to absorb the impact of raised taxes.

It comes at a time when fluctuations in fuel prices, and market turbulence from global economic policy are causing great uncertainty and instability. Already, firms are passing on costs to customers, reducing competitiveness across the board.

How can digitalisation help the fuel industry manage the risks?

Firstly, companies need to do their sums. The increase to Employment Allowance from £5000 to £10,500 also comes in during April. This will help SMEs offset some of the impact caused by raising Employer NICS because it makes hiring less expensive. It’s possible companies could retain staff with competitive salaries as a result. But it won’t be enough on its own.

Resourcing must be carefully planned, and pricing models will need to be reviewed. These measures may help buffer fuel businesses in the short-term, however, it’s vital more long-term measures are employed. And as Fuel and Oil News points out, digitalising process is hailed as the most effective strategy to adopt.  

Modernising the logistics operations in fuel and oil industries  

There are plenty of examples where adopting a digital strategy has been instrumental in propelling businesses into new levels of efficiency, accuracy and speed. TouchStar customers see the benefit of prioritising the adoption of Transport Management Systems (TMS), which offer a comprehensive approach to route planning and optimisation, proof of delivery, instant notifications and fleet tracking. The return on investment in a single TMS solution is notably higher than making these changes piecemeal. Among the greatest benefits is the reduction in paperwork and administration, and the ability to make real-time decisions based on live data.

Delivering a fast ROI in fuel logistics automation In tough economic times, it can be tempting to stop IT deployments in the interest of saving capex and opex. However, strategic IT investments, that automate processes like invoicing, build capacity and resilience and improve data insights can be hugely beneficial. The same is true for proof of delivery – giving drivers the ability to input real time updates as they offload tank deliveries at the forecourt, eliminates delays to raising paperwork and reduces the possibility of a dispute, and therefore the need to raise credit notes. It’s these kinds of changes that our customers say make a big difference.

TouchStar EPOD TMS will yield tangible benefits, such as 25% boost to productivity, a 10% reduction to shipping costs, a 75% drop in the time it takes to do audits, and a 90% reduction in the paper trail. Using savings to fund other strategic fuel industry programmes TouchStar's EPOD TMS also optimises delivery runs using historic route intelligence, leading to less manual route planning, fuel savings, and the ability to complete more jobs. All these benefits culminate in a streamlined, more efficient, and profitable operation, which ensures a rapid return on your investment.

These outcomes are helping some clients see an ROI by the end of year one, with the cash that’s saved used to fund expenses or further investment in labour and IT programmes.

If you are looking at ways you can deliver more with less, then our team of specialists can help you find the right investment strategy with long-term benefits and solid ROIs.

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