Under the partnership, Velocity members can earn two points for each litre of fuel, and another two points for each dollar spent in store.
There is no minimum spend requirement, and anyone without a Velocity card can still earn points using a BP temporary card provided it is linked to their loyalty account.
The move is aimed at boosting Velocity membership, currently at 4.8 million.
Qantas’s Frequent Flyer program has more than ten million members.
Australia and New Zealand President of BP Andy Holmes said the partnership was a win for customers who would benefit every time they entered one of their stores.
“This is the first time an Australian fuel provider has brokered a direct partnership with an airline loyalty program,” Mr Holmes said.
“We’re incredibly excited to be able to give back to our customers who will be able to earn rewards with Velocity on their everyday spending.”
He said the deal would also help BP grow its retail business in the Australian market.
Velocity Frequent Flyer Chief Executive Officer Neil Thompson said they were thrilled to be joining forces with BP.
“This exciting partnership is yet another example of how Velocity is transforming the loyalty landscape in Australia,” Mr Thompson said.
Last week Virgin Australia announced it would provide “free food” on all of its domestic flights, taking another step closer to Qantas’s “full service” model.
The two groups have been locked in a fierce battle since former Qantas executive John Borghetti took over the reins of Virgin Australia, and went about transforming the former budget carrier into a premium airline.