The cost of fuel is at its lowest for four years. The combination of a glut of fuel meeting absent demand thanks to the coronavirus pandemic lockdown has led to tumbling prices at the forecourt. The April fuel report from the AA found supermarkets retailing fuel at £104.8 per litre. But costs have reduced further during May.
At the time of writing, many supermarkets were retailing fuel below £1 per litre, although the RAC Fuel Watch believes it could go even lower still.
All of this is welcome news to managers of vehicle fleets. Low fuel costs help products to become cheaper, reduces transportation costs, and lowers essential fleet user expenditure.
So it’s important not to waste the savings available to your fleet by failing to manage fuel expenditure correctly. Now is absolutely the time to focus closely on real cost control and identify where there is cost seepage in your fleet. Afterall, there’s no point in leaving the savings at the fuel filling station. Would your management approach be different if the cost of fuel was high?
Strategies to manage fuel expenditure
There are plenty of proactive methods to manage fuel expenditure, from fuel cards to driver economy leagues. Let’s consider some of the options open to you:
Fuel cards
Fuel cards help reduce your administration and assist your cash flow. There is one consolidated VAT invoice, usually at the end of each month, which will require settling. Drivers submit their fuel usage via an online tool, splitting business and private mileage. The private mileage is then repaid to avoid benefit-in-kind tax.
As a fleet manager you can monitor activity through an online portal which will highlight exceptions, such as abnormal usage. This could be potential fraud or it could mean a driver needs some additional training. All round, though, you actually get more management control over your fuel expenditure.
Specify where fuel is bought
Another advantage of a fuel card is that you can specify where fuel is bought – supermarkets are generally cheapest. And you can prevent refuelling at expensive motorway service stations.
Fuel leagues
Managing fuel is not just about fuel cards. It’s important to gain employee buy-in. One way to achieve this is to set up fuel leagues identifying which is the most economical driver to encourage lower fuel consumption. Worthwhile prizes ensure staff engagement.
How long will the dip in prices last?
Fuel prices tend to be volatile at the best of times, so there is no guarantee we will have such low prices for an extended period.
The fuel producers have cut production to reduce the excess crude in the market; and the price of a barrel of oil has started to edge upwards.
So while there are significant downward trends in fuel prices at the moment, prices will undoubtedly rise at some stage in the future. In the meantime, managing fuel expenditure will allow your fleet to benefit from the low prices today; and manage price increases when they eventually feed through to the pumps.
Next steps
If you would like to know more about managing fuel costs effectively, please call CBVC Vehicle Management on 01283 351200. We will be pleased to assist you.
