In this day and age of high priced fuel fleet managers need to have a fairly comprehensive knowledge of the fuel market. This was not always the case. Years ago when diesel fuel prices were considerably less expensive than it is today, and market instability was a daily move in the wholesale market of less than a penny, the fleet manager considered fuel as just another operating expense. After all a price increase of less than a penny was not going to bankrupt his company.
People are always surprised to learn that over 1.5 percent of a company’s fleet fueling budget goes to theft and that eighty-one percent of fuel thefts are an inside job, with the other nineteen percent being an outsider siphoning off fuel or using one of your fleet fuel cards without proper authorization.
For as long as anyone can remember, until recently that is, diesel fuel was always less expensive than gasoline which made things easy for fleet fuel managers. Why then have diesel fuel prices risen to the point of being higher than gasoline causing your fuel management upside down?
What a difference eight years makes in the world of fleet fuel. In May 2002 the average diesel fuel price was $1.30 a gallon and the percentage of that price collected in federal and state fuel taxes was 37%. At that price many of us complained about the high cost and the high tax rate. As the price of fuel rose through the years, taxes remained relatively stable in most states based upon a cents per gallon tax rate. Throughout the subsequent years as the price of fleet fuel increased the tax rates as a percentage shrank to less than 10% of the total cost of fuel in July 2008 when diesel fuel prices hit its all time high of $4.70 a gallon, to the current rate of 15% in May when the average national price was $3.06.
Every day we deal with thousands of fleet fuel transactions. Some fleet fuel card companies are better than others for customer service, discount deals, acceptance and information. We see this all of the time as we analyze fuel transactions for our fuel management clients. We are well aware of high diesel fuel prices and transaction fees that we see on a daily basis. How about the fees you pay when you pay by credit card and not cash?
My guess is that most of you have a fuel management program. It is either real or it’s in your head but you believe you have an effective fuel program that is money saving when it comes to buying fleet fuel. You might really have that type of program, most of our research shows that most companies don’t have a comprehensive program when it comes to their fuel management needs.
I had a pretty moving experience last week and it has led me to think about a lot of things in life. As I have been thinking about these things, I realize how similar fuel management and maybe any profession are close to your life.
Few things are out of the hands of fleet fuel managers, while the price of fuel itself maybe one of those things there are other ways to still have a handle on your fleet fuel management. Take for instance the WAY that your fleet fuels. Do you use mobile fueling or fuel at a retail station? Mobile fueling could just be of the details that a fleet fuel manager has under control and its convenience is unmatched.
Have you have been to Las Vegas, Atlantic City, or the horseracing track? Have you ever bet on a football game? Do you ever feel like you’re going to win?
April showers bring May flowers … but you might already have water in your fuel tank!