Why it’s smart to review fuel policy when prices are low
Fuel prices fall again! Petrol down to below £1 a litre! These headlines would have been unthinkable in the past and certainly the dramatic fall in fuel prices has been one of the most surprising developments of recent years.
Good news for fleet managers? Of course. Who wouldn't like to see one of their biggest expenses come down in price? It has relieved the pressure on many budgets and there’s been an attitude of “enjoy it while it lasts” in the industry. We all believe prices will only go up in the future.
But before you relax too much, this is a good time to think about your overall fuel management policy because the true cost is more than just the price at the pump. Is your fuel card giving you the full benefit of low prices? If it carries administration/transaction charges, they’re eating up some of the money you’re saving.
That’s especially true if your drivers are topping up or ‘splashing’ rather than waiting for a complete fill up. The more often they refuel, the more the charges add up.
So it’s a good time to review policy and consider a fuel card with no transaction charges so all cost savings go straight to your bottom line. As an example, one major supermarket reported a fuel budget saving of £300,000 in the first year after switching their fuel card provider. A further £500,000 of potential savings from fuel costs and tax efficiencies were also identified.
As an added benefit, unlike most other systems, you can be reimbursed if your actual fuel costs are lower than your approved Mileage Allowance as there’s less wear and tear on your vehicles.
A good time to review? Yes, when you take into account that increased efficiencies and savings achieved now will be magnified when fuel prices go up.