Basic BSOG Facts
In the coalition Government’s initial spending review on 18th October 2010, it was announced that the Bus Service Operators Grant (BSOG) would be cut by 20% in the year 2012-2013. The advance warning was designed to give operators time to adjust and find ways to counteract the cuts.
BSOG is paid by the Department for Transport to reimburse operators for some of the excise duty paid on fuel used on eligible local bus routes. BSOG was designed to ensure that less profitable routes were kept operating for the benefit of users.
The current amount of duty paid per litre of diesel is approximately 57p, with BSOG reimbursing 43.21p per litre. The rebates for biofuels (biodiesel and bioethanol) were higher in previous years, but have already been cut to the same rate as diesel this year. Further discounts are available, for example an increase of 3% is awarded to bus operators that can demonstrate fuel savings of 6%.
There are also incentives for operators using ITSO smartcard systems, who receive an 8% increase in BSOG and those operators that fit AVL receive a 2% increase. However, neither of these incentives can be claimed for routes secured by Transport for London.
The incentives are cumulative, so if an operator adopts all of these incentives they can increase their basic BSOG rate by 13%.
Finally, operators of low carbon emission buses, ie those that are able to achieve a 30% reduction in greenhouse gas emissions compared to an average Euro 3 diesel bus, are eligible for an additional BSOG payment of 6 pence per kilometre.
What Can You Do?
21st Century Technology, the company behind the award winning fuel saving device EcoManager, says that bus operators can act now to off-set the rise in fuel costs when the government cuts BSOG next year.
The impact on bus operators is significant. The cut of 20% will increase fuel costs by over 8.6p per litre. Just one bus doing 50,000 miles a year (at 8.5 mpg) could end up costing an operator over £2,300 a year more after the cuts. Multiplied across a fleet of buses, the increase in fuel bills is enormous.
Bus operators are being advised to seek ways to save fuel, as the fuel efficiency bonus of 3% higher BSOG for buses that save 6% on fuel is being maintained.
“We have seen a massive rise in enquiries since the announcement on BSOG and this continues as we start to prove the savings are real” says Paul Rogers, Sales and Marketing Director at 21st Century. “More and more companies realise that EcoManager shows their drivers how to be more efficient and with more than 6,000 buses already fitted across Europe we have proven savings of over 12%, which goes some way towards offsetting the impact of BSOG.”
He continues: “Even after the cuts in BSOG, by harnessing the average savings achieved through the use of EcoManager, and claiming the additional 3% fuel efficiency incentive, each bus could save over £2600 a year in fuel costs alone.
“Industry experts have predicted even higher fuel costs next year, so with this cut in BSOG operators are facing increasing fuel bills. However, bus operators have it within their power to reduce their fuel consumption now and keep their fuel bills to a minimum.”
Rogersconcludes: “With new software, new features and our exclusive Driver’s Aid with Passenger Comfort Indicator, we believe EcoManager is the best way for any operator to minimise the effects of BSOG cuts on their business”.
Further information on BSOG can be obtained form the Department for Transport’s BSOG team on 020 7944 8588