Key Takeaways

  • Contract fuel gives operators discounted pricing by committing volume through a fuel supplier's network.
  • The authorization and settlement cycle for contract fuel programs is usually different from standard bank-card processing.
  • Major contract fuel brands each have unique technical requirements that FBO software must handle individually.
  • Pricing structures vary from cost-plus to posted price discounts, and getting them wrong leads to chargebacks.
  • Accurate data capture at the point of sale is the single most important factor in avoiding contract fuel disputes.

Contract fuel is one of the most important operating workflows at many FBOs, and it is also one of the most complex. If you have ever wondered why a contract fuel transaction was rejected, why a remittance did not match what you expected, or why a dispute appeared long after fueling, this article explains the moving parts that usually cause those problems.

I have been building FBO software that processes contract fuel transactions since the late 1990s. The technology has evolved significantly, but the fundamental business model and the common pitfalls have remained remarkably consistent.

What Contract Fuel Actually Is

Contract fuel is a pricing arrangement where an aircraft operator (the buyer) enters into an agreement with a fuel supplier (the intermediary) to purchase fuel at negotiated prices across a network of FBOs. The FBO agrees to honor the contract pricing when a pilot presents the supplier's fuel card.

Think of it as a wholesale buying arrangement. The operator commits to purchasing fuel through the supplier's network. In return, they get pricing that is typically lower than the FBO's retail (or "posted") price. The fuel supplier makes money on the spread between what the operator pays and what the FBO receives. The FBO makes money by moving volume and earning a per-gallon margin that the supplier pays.

The key difference from standard credit card processing is that contract fuel transactions are not just payment transactions. They are fuel purchase authorizations governed by a contract that specifies pricing, eligible aircraft, eligible airports, and sometimes fuel quantity limits.

The Major Contract Fuel Brands

Avfuel

Avfuel is one of the major contract fuel networks in North America. Their programs can involve contract pricing, loyalty activity, and supplier-specific authorization and settlement rules. The exact data fields and workflow depend on the transaction type and the FBO's participation in Avfuel's programs.

EPIC and Other Major Programs

EPIC and similar brands have their own participating-location requirements, authorization logic, and remittance practices. What matters operationally is whether your FBO is set up to accept the program and whether your software supports the exact workflow your staff sees at the counter.

Titan Aviation Fuels

Titan operates with its own mix of account types, data requirements, and in some cases release or trip-specific validation. If you serve international, charter, or managed-fleet traffic, confirming what data your software captures for those programs is especially important.

World Fuel Services

World Fuel Services supports domestic and international contract fuel activity with its own mix of authorization, pricing, and settlement expectations. FBOs that serve managed fleets, charter operators, or international traffic should confirm the exact World Fuel scenarios their software supports.

Other Branded Programs

Depending on the airports you serve, you may also encounter other branded or legacy contract fuel programs. The important takeaway is that fuel card support is not one thing. It is a collection of separate program approvals, routing rules, data requirements, and reconciliation processes.

The Authorization and Settlement Cycle

The lifecycle of a contract fuel transaction has several distinct stages, and each one has implications for the FBO.

Step 1: Card Presentation and Identification

When a pilot presents a fuel card or account credential, the FBO's software must identify which program it belongs to. That routing may be based on card ranges, account identifiers, supplier tables, or other maintained logic. Getting it wrong usually means the transaction is sent down the wrong path and fails or has to be reworked manually.

Step 2: Authorization Request

The software sends an authorization request to the supplier's system. That request may include the account credential, FBO location, fuel product, quantity or estimated amount, price, tail number, and sometimes trip or destination data. The supplier then checks whether the account is valid and whether the transaction fits the contract or release terms.

Step 3: Fueling

Once authorized, the FBO dispenses the fuel. At this point, the authorization is essentially a promise that the supplier will pay for the transaction. The actual quantity dispensed may differ slightly from the authorized quantity, which is normal and expected.

Step 4: Batch Settlement

At the end of the day, or on whatever schedule the program requires, the FBO's software submits completed transaction data for settlement or remittance. That submission contains the final fueling details and supporting information the supplier needs to validate the transaction.

Step 5: Payment

The supplier then remits payment to the FBO according to the applicable agreement. Timing and remittance structure vary by supplier, program, and contract terms, which is why contract fuel receivables need to be tracked separately from ordinary credit card settlements.

Pricing Structures

Contract fuel pricing is more complex than most FBO managers initially realize. There are several common pricing models.

Cost-Plus: The operator pays a supplier-defined cost basis plus a fixed markup per gallon. The exact cost basis and visibility into that number depend on the supplier arrangement.

Posted Price Discount: The operator gets a fixed discount off the FBO's published retail price. For example, $0.50 per gallon below posted price. This is simple but means the operator's price fluctuates with retail.

Fixed Price: The operator pays a negotiated price per gallon for a defined period or release. This gives the operator budget certainty but can create margin pressure if supply costs move unexpectedly.

Tiered Pricing: The per-gallon price varies based on volume - the more fuel purchased, the lower the price per gallon. This encourages volume commitment.

Your FBO software needs to apply the correct pricing structure for each card and each transaction. If the pricing in the authorization request does not match what the supplier expects, the transaction will either be declined or will result in a chargeback during settlement.

Contract Fuel vs. Retail in Your Software

From a software perspective, contract fuel transactions and retail fuel transactions follow completely different paths. Retail transactions are straightforward - the fuel is priced at the posted rate, paid for with a standard credit card or account, and settled through your normal payment processor.

Contract fuel transactions require the software to look up the correct pricing, communicate with the supplier's gateway, capture additional data fields, and track the transaction through a separate settlement process. The reporting is different too - you need to reconcile contract fuel revenue separately from retail revenue because the payment timelines and amounts are different.

Good FBO software handles this distinction automatically. When a fuel card is swiped or entered, the system identifies it as contract fuel, applies the correct pricing, sends the authorization to the right gateway, and tracks the settlement separately. The line staff should not need to think about which processing path to use.

Common Issues and Chargebacks

Missing or Incorrect Tail Numbers

This is one of the most common causes of disputes. If the tail number on the transaction does not match the aircraft or release information expected by the supplier, the charge may be questioned or rejected. Always verify tail number data against the aircraft being fueled and the information presented for the transaction.

Pricing Mismatches

If the price submitted in the authorization does not match the contracted rate, the transaction will be disputed. This usually happens when the FBO's software has stale pricing data or when a contract renewal changed the terms.

Expired Cards and Accounts

Contract fuel cards expire, and operator accounts get suspended. Always authorize before fueling - never dispense fuel on an expired or declined card with the plan to "sort it out later." That fuel is coming out of your margin.

Duplicate Transactions

Submitting the same transaction twice in a settlement batch results in a chargeback for the duplicate. Your software should have safeguards against double-submission, including unique transaction identifiers and duplicate detection logic.

Late Settlement

Most programs have a settlement or submission window. If you miss it, you can create avoidable disputes or payment delays. Timely daily reconciliation and submission is the safest operating practice.

Frequently Asked Questions

What happens if a contract fuel card is declined at my FBO?

A decline means the fuel supplier's system rejected the authorization. Common reasons include an expired card, an aircraft not covered under the contract, exceeding a volume or dollar limit, or a suspended account. Your software should display the decline reason code so you can inform the pilot. You can still offer to fuel the aircraft at retail price using a standard credit card.

How long does it take to get paid for contract fuel transactions?

Payment timelines vary by supplier, program, and your contract terms. Some remittances move quickly, while others take longer because of settlement cycles and validation steps. Your FBO should track these receivables separately so delays are visible.

Can my FBO accept contract fuel cards from brands I am not affiliated with?

In many cases, yes. Even if your FBO is branded with one fuel supplier, you can often accept cards from other networks as a participating location. You will need to set up a merchant relationship with each supplier whose cards you want to accept, and your FBO software needs to support the integration with each supplier's processing gateway.

What data do I need to capture for a contract fuel transaction?

At minimum, you need the core fields required by the supplier program and your internal controls, usually including the account credential, aircraft identification, fuel product, quantity, pricing, and the date and time of fueling. Some programs also require trip, location, or fueling-equipment details. The key is capturing the required fields consistently and accurately.

Why did I get a chargeback on a contract fuel transaction from three months ago?

Contract fuel chargebacks can appear well after the transaction date. The most common reasons are pricing disputes (the operator's contract specified a different rate), tail number mismatches (the aircraft was not covered), or duplicate submissions. Review the chargeback documentation carefully - it will specify the reason - and check your original transaction data against the contract terms.