Businesses should not take their eye off the pumps just because petrol and diesel prices have fallen, warns software market leader cfc solutions’ md, Neville Briggs.Crude oil prices are now more than a third lower than the July peak of $147 a barrel.
Pump prices are some way behind this kind of drop but petrol is already nearer an average of 110p per litre rather than the 120p of recent months.
However, the important statistic to bear in mind is not that petrol is 8p per litre cheaper than it was a few weeks ago; it is still some 50p per litre more expensive than it was in 2002.
The developing picture suggests that, whatever the short term peaks and troughs, fuel prices will continue to rise above inflation. And probably faster than any other business car management cost.
So don’t treat short term falls in fuel price as an excuse not to take action in managing the expense.
Even at today’s lower prices, petrol and diesel are still around 15-20% per cent higher at the pump than a year ago. Fuel is a cost that is forming an ever larger part of fleet expenditure.
But don’t believe that you have to just grin and bear rising prices. The truth is that the expense responds to controls just like any other.
At cfc we have a standard five point plan to fuel management.
1 Measure your fuel use
A large number of companies simply don’t know how much fuel they use overall or per driver or per vehicle. You need to put a monitoring system in place. The easiest way to do this is to buy all petrol and diesel through specialist fuel cards. You can then access the information collected as paper or software generated reports that will give you an overall picture and highlight individual problems.
2 Formulate a fuel policy
Having a policy on fuel use is a signal to your organisation that you are taking the issue seriously. There are a number of areas to consider but even simple steps can produce good long term results – for example, don’t go for cars that do not meet a pre-agreed combined average fuel consumption figure.
3 Manage the issue
With the information provided by your fuel cards, you will be able to manage your fuel use proactively. Software is useful here. For example, you can set up what you believe to be acceptable bands of fuel consumption for different types of vehicle and ask the system to notify you when drivers or vehicles fall outside of these. You can also use your fuel card to closely manage fuel spend – for example, by specifying that drivers only use outlets that you consider to be price competitive, such as supermarkets.
4 Consider the green angle
One of the good things about taking a proactive stance on managing fuel use is that you will also be able to manage your carbon footprint more effectively. This can make the whole issue easier to deal with internally because you can stress the importance of corporate responsibility – for example, it may be easier to encourage drivers to share cars or take more care planning routes on environmental than cost grounds.
5 Cancel out fraud
Most business car managers will tell you that rising fuel prices also tend to lead to higher levels of fraud among drivers. If you operate a fuel card system and link each card to a vehicle, then fraud is almost impossible. However, if you simply allow drivers to reclaim fuel from receipts submitted, it is all too easy for them to fill up their partner’s car using company money once a month. The administrative burden of a pay-and-reclaim system means that it is unlikely they will ever be caught.
These are all relatively simple steps but they will help you to control fuel expenditure and also cut your carbon footprint. Like many areas of business car management, it is all about taking a methodical approach and implementing measures thoroughly.
Further information
- If you’ve found this item helpful you might also like to read our Advice Centre article on Why fuel cards will save you costs
- You might also like to read our Advice Centre article Creating a company car policy for a small business