Vat added twice?

I have a credit card and they also gave me fuel cards attached to the credit limit.
I'm supposed to be paying less at the pump but have discovered that if I use the Credit Card for fuel, it shows as goods and services and I pay the exact amount, but if I use the fuel card, they put it down as fuel and add 20% vat onto the cost.

Surely that can't be right, as they're not providing the fuel?

I pay cash of £100, i get a receipt showing 20% vat of £83.33 plus vat, so it totals to £100.

I use the card and i end up paying them £120

Reading about the Vega International Case but I can't understand if they are allowed to do this.

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