Qantas Frequent Flyer has announced a new customer loyalty partnership with energy giant BP. It will see Qantas Frequent Flyer members able to earn Qantas Points directly through a new BP Rewards program.
What are the changes?
You’ll earn points when purchasing fuel and eligible in-store products at any of BP’s fuel outlets across Australia. You’ll be able to choose whether to earn either BP Rewards points or Qantas Points. However, we don’t know the earn rates yet.
The new partnership is set to begin in early 2020 and will displace the current Velocity-BP partnership, which will remain active until the launch of BP Rewards. The most likely timeframe is around March-April 2020.
The BP Plus fuel card will also become the exclusive fuel card of the Qantas Business Rewards program. That spells the end for Qantas Business Rewards members being able to earn points when using a Caltex StarCard.
Our take on these changes
For those loyal to Qantas Frequent Flyer, this will be welcome news and provides another option to earn Qantas Points at fuel outlets. It will sit alongside the Caltex-Woolworths Rewards partnership, which will continue as normal. (A reminder you can convert Woolworths Rewards points into Qantas Points.)
However, those dedicated to the Velocity Frequent Flyer program will now see their options to earn Velocity Points at fuel outlets reduced to just one, through the Coles Express-flybuys partnership. (flybuys points can be converted into Velocity Points.)
Qantas will provide further information in due course, such as the earn rate on fuel and in-store purchases. We will update the comparison guide below once these changes are announced. However, until then, it provides a great summary of where you can get the most bang for your buck when earning points at petrol stations.
In this guide
When you fill up your car, should you go to BP and earn Velocity Points, Caltex to earn Woolworths Points (convertible to Qantas Points), or is Shell the better option to earn flybuys points to transfer to Velocity instead? Which will give you most value?
As a quick exercise, let’s calculate the petrol station spend required per point to then redeem on a domestic Business Class flight on Qantas or Virgin Australia between Sydney and Melbourne.
Important notes before doing the numbers
- I have assumed that fuel is $1.20 per litre (obviously this fluctuates a lot over time) and that no discount vouchers are being used
- BP and Coles Express (using the 8 bonus points/L option) offers points per litre, while Caltex and Coles Express (using the 4c/L discount) offer them per dollar
- We aren’t including in-store purchases as part of the comparison
Velocity and BP
Currently, BP hand over 2 Velocity Points for every litre of fuel we buy. Using our $1.20 per litre assumption, then we spend 60c for each Velocity Point we earn ($1.20 / 2).
Being that we need 15,500 Velocity Points to get our flight, that’s a relative ‘cost’ of $9,300 spent on fuel at BP.
Velocity and BP also run frequent points bonus promotions, which can help push your Velocity balance up further too.
This partnership will end around March 2020.
Woolworths and Caltex
You’ll earn 1 Woolworths Reward point per dollar spent on fuel (and only fuel). These will convert to Qantas Points once your account has 2,000 Woolworths Points, giving you 1,000 Qantas Points.
You can earn Woolworths Rewards points at all Star Mart, Star Shop and The Foodary outlets.
Note: Woolworths Rewards does not operate in Tasmania.
flybuys and Coles Express (Shell)
Coles Express offers 1 flybuys point per $2 spent. flybuys can then be transferred to Velocity Frequent Flyer at a rate of 2,000 FlyBuys points = 870 Velocity points, so 1 flybuys point = 0.435 Velocity points. Under a 15% bonus promotion, this increases to 1 flybuys point = 0.5 Velocity points.
Flybuys members do have an option to forgo the 4c/L discount in exchange for 8 bonus flybuys points/L in addition to the 0.5 points/$1 already earned when they spend $30 or more on a Coles shop. This means that for each litre of fuel purchased, flybuys members will receive 8 points in addition to a further 0.6 flybuys points based on earn rate of 2 flybuys points/$ spent and a fuel price of $1.20/L.
A comparison by numbers
| Frequent flyer program-petrol station | Velocity-BP | Woolworths-Caltex | flybuys-Coles Express (4c discount) | flybuys-Coles Express (8 bonus points) |
|---|---|---|---|---|
| Earn rate | 2 Velocity Points per litre | 1 Woolworths Point per $1 (= 0.5 Qantas Points after conversion) | 1 flybuys point per $2 (= 0.435 Velocity Points after conversion) | ~8.6 flybuys point per litre |
| Points needed to redeem a Business Class flight between Sydney and Melbourne | 15,500 Velocity Points | 18,400 Qantas Points | 35,632 flybuys points | 35,632 flybuys points |
| Fuel spend required | $9,300 (15,500 points x 0.60c spent per point) | $36,800 (18,400 Qantas Points x $2 spent per Qantas Point) | $71,264 (35,632 points x $2 spent per point) | $4,971 (35,632 points x 0.14c spent per point) |
So, which one will earn you most value?
Using those numbers above, and this specific flight comparison, it is clear that the flybuys-Coles Express tie-up using the 8-point bonus points promotion gives you the best bang for your buck, about two times as valuable as the Velocity-BP and eight times the Woolworths-Caltex combinations.
Ironically, the flybuys-Coles Express using the 4c fuel discount option comes out worst, however, our calculations did not factor in the value of the 4c discount.
Summing up
All things being equal (including fuel prices), if you are working towards a flight redemption, you’re most likely to get there the quickest if you fill up at Coles Express and take advantage of the 8c bonus points option.
Getting fuel at BP and earning Velocity Points comes in second, earning Qantas Points through Woolworths Rewards at Caltex comes in third, and earning flybuys points in conjunction with the 4c fuel discount at Coles Express will take the longest.
As is often discussed in most of the articles on this site, there is a myriad of ways to earn points, and so long as you are doing more than a few of them, then rewards are not far away, and every little bit adds up.
Images courtesy respective fuel companies.
Any reason why getting the points would be better?
Also, you’ve neglected to consider the “Cash” Option of buying the cost of the flight outright?
I value FlyBuys as 0.5c/point: 200 points is redeemable for $1 at Coles, which could be put towards a GiftCard (e.g. Flight Center or Prepaid Mastercard), which could then be used elsewhere. The evaluation of 45,000 FlyBuys points would be worth AU$225 – would that be comparable or more expensive than a MEL>SYD in Business?
Some medium-length Virgin Australia flights (eg SYD-CNS SYD-ZQN) are relatively cheap with Etihad miles (6900 EY vs 16900 VA for Economy)
If you have an Platinum Edge Amex you can earn 2 MR pts/$ at BP but 3/$ (using Coles Group Giftcard bought at Coles) or even 4/$ (with giftcard and local champion bonus) at Shell
In practice the price of fuel (including any needed to divert to the petrol station) usually outweighs any point gains. The 4c docket for Shell from Coles will affect this.
At Caltex Woolworths, you can use a 5% discount WISH card bought with Platinum Edge for 3 MR pts/$ as well as a Woolworths discount voucher (and some Myer points if it is branded both Woolworths and Starmart)
Let’s assume you buy a $100 gift card, and spend every cent on fuel just for the simplicity of calculation. If you get the card at a 5% discount, the $100 card cost you $95, saving you $5. If you buy the card on an Amex Platinum Edge that earns 3 MR points per dollar for Woolies, and if you value MR points at 2c per point as Keith does in his points valuation page, then you would get $5.70 value from the $95 you spend on buying that gift card. At this point we’ve gotten $10.70 value for a $100 fill up.
Next, most people would have a 4c/L voucher, which for a $100 fill up at 110c/L would save you $3.64. After all those calculations, you add the 0.435 QF points per dollar giving 43 QF points (rounded down), which would be worth $0.60 if valued at 1.4c per point. Once everything is added together, your $100 fill at a Woolworths Caltex netted you $14.94 of value, almost 15% of your fuel spend.
If we go back to BP/Velocity, again if we pay with the Amex Platinum Edge, we would only get 2 points per dollar at the check out, getting us $3.40 of value in MR points. Once I swipe my Velocity card at the check out, the 2 Velocity points I earn per dollar would be worth $2.40 if I value the points at 1.2c per point. So in the end, my $100 fill at BP only nets me $5.80 or 5.8%.
Now of course, redemption of points varies and personal circumstances and preferences dictate which points to earn, but when the overall difference is a massive 2.58x, I think it’s worth pausing to think about where to fill up. Even if you don’t have an Amex card with such a high earn rate, the 5% discount you can easily get from gift cards stacked with the 4c/L voucher easily overwhelms the extra Velocity points you earn.