Managing Fuel Costs

By John Maslen

The price of petrol and diesel has rocketed over the past year and it is set to stay high.

Although short-term price wars might bring temporary relief, experts believe that the current price of petrol and diesel is set to increase in the long-term.

For a growing business, where intense competition might make it difficult to pass on the rising cost of fuel to customers, keeping these spiralling costs under control can be a real headache.

But a recent survey found that 49% of fleets running fewer than 50 vehicles have not taken any steps to minimise the impact of fuel price increases.

In addition, 29% of larger fleets said they are also taking no action, according to a survey of 500 companies by Northgate Vehicle Hire.

Yet a vast array of solutions are available to companies and many of them are relatively simple and free to introduce, as they just need changes to management policies and effective driver controls.

If your drivers fill up and claim back the cost from the company, then simple steps could include encouraging them to purchase fuel from outlets that promote the best deals.

Ensure the vehicles they are driving are the most efficient available and that they are properly serviced.

If your business runs a fuel mileage rate system, where drivers are paid a pence per mile rate for their journeys, then look at why they are making the journeys and consider alternatives to reduce mileage.

Some companies use telematics systems to monitor vehicles out on the road. They can track vehicles and see how they are driven, then introduce changes, such as more economical routes or special driver training courses, to make the fleet more efficient.

Even without technology, you need to monitor journeys carefully, as higher fuel prices are likely to lead to an increase in fraud, as employees try to use company money to fund their private fuel costs.

Pay and reclaim systems are the most likely to be hit by fraud, because an employee can simply add a few miles to every journey, or create fictional journeys to boost their income.

Fuel cards might be the answer here, as fuel use is taken straight from the forecourt and entered into a computer system.

However, these still rely on correct information from the driver, such as mileage readings and numberplate information, and they can still be open to fraud.

For example, some drivers have tried to fill up their own car and their partners’ from a single pump.

The main way in which fleets can actively manage down fraud is to closely monitor and manage whichever system is used, ensuring exception reports identify excessive mileage, very large transactions for a single fill or very poor fuel economy.

Top tips for Greener Fleet Management

• Promote cars with low CO2 emissions which reduces fuel bills and also cuts employee car tax and National Insurance costs.

• Ensure vehicles are regularly serviced — poorly maintained vehicles have higher toxic emissions and fuel consumption.

• Identify opportunities to reduce mileage by recording and analysing business travel.

• Record and analyse individual fuel consumption to encourage fuel efficient driving.

• Promote safe, economic and environmentally friendly driver training.

• Ensure mileage reimbursement rates are environmentally sensitive and do not encourage drivers to make excessive journeys.

• Provide access to websites and route planners to minimise vehicle mileage.

• Promote satellite navigation and telematics to help drivers avoid congestion and use the most efficient route to reach their destination.

• Review arrangements for tele/video conferencing as an alternative to business travel.

Source: Energy Saving Trust