Best Fuel Credit Cards in India 2021

Given the recent surge in domestic fuel prices, it makes sense to figure out the best fuel credit cards in India. Simply because using the right credit card at a petrol pump can help one save around 2-4% annually on one of the most inelastic expense. Given fuel expense is an inelastic expense it’s not surprising that nearly every major card issuer has a co-branded card with an OMC.  In this post, I have highlighted 4 credit cards that I feel are the best fuel credit card in India.

How I arrived at the monthly expense on a credit card?

I have taken a monthly fuel expense of INR12,500. I arrived at this number by assuming a daily 50km commute in a 4-wheeler giving a mileage of 10kmpl. Resulting in monthly travel of 1250km, assuming 25 days of working. Further, I assumed fuel price at 98/litre.

Besides, I assumed the cardholder would do a 10k non-fuel expense every month on the credit card. Resulting in an annual card expense of 270,000. Thus, I used this as a template to evaluate the credit cards to arrive at a blended reward rate.

Best fuel credit cards in India

4. Citibank IndianOil Credit Card

Fees:

• Joining fees: Nil.
• Annual Fees: INR 1000+ GST. Annual Fee waived off on annual spends greater than INR30k.

Rewards and Benefit:

• Reward Points:
  • Reward rate of fuel spends
    • 4 reward points for every 150 spent at IndianOil pumps. i.e. 2.7% reward rate.
    • What I understand from the T&Cs is that if one does a single transaction of more than 10k then no reward points are accrued. However, all fuel transactions under 10k will earn reward points.
    • No reward points on spends at non-IndianOil pumps.
  • Accelerated Reward Points:
    • 2 reward points for every 150 spent on grocery and supermarket. i.e. 1.33% reward rate.
  • Base Rewards: 1 reward point for every 150 spent on all other spends. Citibank now has a long list of exclusions including Uber/Ola and insurance spends. Here are the list of exclusions and this was the primary reason as to why I surrendered my Citi Premiermiles credit card.
• Lounge Access: No

Takeaway

Citibank IndianOil credit card offers a 2.7% reward rate on fuel spends and 1.9% on a blended basis. While the 2.7% reward rate on fuel spends is good, the blended reward rate is quite low. The blended reward rate will be even lower in actual usage thanks to many exclusions Citi has on reward accrual. The most disappointing ones are 0 reward points on Uber/Ola and insurance spends. I guess, Citi could have capped reward points on insurance spends, but giving 0 reward points is not done.

3. BPCL SBI Credit Card

Fees:

• Joining fees: INR 499 + GST.
• Annual Fees: INR 499 + GST. Annual Fee waived off on annual spends greater than INR50k.

Rewards and Benefit:

• Joining benefit:
  • 2000 reward points (worth INR500) on payment of joining fees.
• Reward Points:
  • Reward rate of fuel spends
    • 13x reward points for every 100 spent at BPCL pumps. i.e. 3.25% reward rate.
    • Monthly reward points are capped at 1300 points. i.e. benefit accrues only till 10k fuel spends. No reward points post that.
    • No reward points on spends at non-BPCL pumps.
  • Accelerated Reward Points:
    • 5x reward points for every 100 spent on dining, departmental stores, groceries and movie spends. i.e. 1.25% reward rate.
    • Cap of 5000 reward points per month.
  • Base Rewards: 1 reward point for every 100 spent on all other spends. Wallet load excluded from reward accrual.
• Lounge Access: No

Takeaway

SBI BPCL credit card offers a 3.25% reward rate on fuel spends. However, once the fuel spends go above 10K, the reward rate drops to 0. Thus, under the template spends the reward rate is lower at 2.6% only on fuel spends and 1.8% overall. This credit card is most suited for someone whose fuel spends are under 10K per month. Thus, even if one keeps this card exclusively for refuelling purpose one can get around a 3.25% reward rate, which is quite good and also the annual fee will be waived off on annual spending of 50k.

2. BPCL SBI Octane credit card

Fees:

• Joining fees: INR 1499 + GST.
• Annual Fees: INR 1499 + GST. Annual Fee waived off on annual spends greater than INR200k.

Rewards and Benefit:

• Joining benefit:
  • 6000 reward points (worth INR1500) on payment of joining fees.
• Recurring benefit:
  • Gift vouchers of 2K on achieving annual spending of 3 lakhs.
• Reward Points:
  • Reward rate of fuel spends
    • 25x reward points for every 100 spent at BPCL pumps. i.e. 6.25% reward rate.
    • Monthly reward points are capped at 2500 points. i.e. benefit accrues only till 10k fuel spends. No reward points post that.
    • No reward points on spends at non-BPCL pumps.
  • Accelerated Reward Points:
    • 10x reward points for every 100 spent on dining, departmental stores, groceries and movie spend. i.e. 2.5% reward rate.
    • Cap of 5000 reward points per month.
  • Base Rewards: 1 reward point for every 100 spent on all other spendings. Wallet load excluded from reward accrual.
• Lounge Access:4 domestic lounge access per year; 1 lounge access per quarter.

Takeaway:

The BPCL Octane credit card is a recent launch by SBI Card and offers a whopping 6.25% reward rate on fuel spends. However, there are caveats here and one never really get a 6.25% reward rate on fuel spends.

The 25x reward points on fuel spends are capped at 2500 points per month, which is equal to 10k fuel spends. Thus if one only spends 10k every month i.e. 120,000 per annum, annual fees of 1770 (1500+GST) will be applicable and the reward rate will come down to 3.8%. On the other hand, on spends of more than 10k on fuel every month, the reward rate will decline due to monthly capping. Thus, the reward rate is never actually 6.25% but hovers around 3.7-3.8% on fuel spends. On the template spends, the blended reward rate comes at 3.4%.  Thus if one uses this card purely for fuel spends or for other purposes too, one can get around a 3.5% reward rate, which is quite good.

1. Amex MRCC

You will be surprised to find a mention of Amex MRCC card in a post for best fuel credit card given that Amex MRCC does not give any reward points on fuel spends. So, exactly how does this credit card feature among the best fuel credit cards?

The answer is simple, the reward points one earns on milestone spends make up for it. I will discuss a few scenarios here. This is despite the reward rate changes that came into affect from 1st April 2021.

Scenario#1:

Spend 150k per annum on fuel assuming 4×1500 transactions every month. The reward rate in this scenario is (12,000 x 0.38)/150,000 = 3.04%. Which is nearly at par with other fuel-specific credit cards.

Scenario#2:

Spend 250k per annum; i.e. 20k+ per month along with 4×1500 transactions every month. The reward rate in this scenario is (24,000×0.38)/250,000=3.65% again nearly at par with other fuel-specific credit cards.

Scenario#3:

Template spends where 12.5k is spent on fuel and rest in other categories. Here, being on the conservative side I have assumed at 20k is not spend every month, the blended reward rate comes at 2.7%, higher than Citi IndianOil and SBI BPCL credit card.

Here the value of 1 point is assumed at 38p (INR 7000 Amazon voucher on 18K points). However, if one goes for the Taj voucher of 14k for 24k points the value of 1 point increases to 58p, nearly 50% higher than what I have assumed in the calculations. Thus resulting in even higher reward rates in all the scenarios discussed earlier.

To maximise the benefit, one must use Amex credit cards at HPCL outlets, as only at these outlets Amex gives fuel surcharge waiver on spends of up to 25k per month.

Summary Tables

 

 

Reward rate working of the above mentioned credit cards.

 

Pro tip: Opt for a fuel credit card of the OMC whose petro pump you visit frequently or is nearest to your place. Because eventually, that is where you would end up refuelling most of the times.

Do let me know your views on the above credit card. Also, do share if any other credit card offers a better reward rate on fuel spends, will update the post accordingly.

Image courtesy: Photo by Jean-christophe Gougeon on Unsplash