When it comes to running a fleet, fuel has become such a high expense that, apart from depreciation of the value of your vehicles, it’s the biggest cost you’ll face.
It’s no surprise that the cost of fuel is under increasing scrutiny as companies seek to put the brakes on excessive spending amid a UK fuel card market worth about £6.5 billion a year1
The overall purchase of fuel in the UK is also on the rise. Total sales of petrol and diesel accelerated to 3.8 billion litres in February 2015, up by 133 million litres on the same month a year before, according to HMRC.
“The more fuel you use, the more tax you pay, so there's a strong incentive to use fuel and mileage productively,” Paul says. “Fuel purchasing and mileage management are key elements of business mobility.”
But how can businesses cut their fuel expenditure without it restricting their day-to-day activities?
Fleet managers now have a variety of options, including innovative solutions such as fuel supplements and additives.
There’s also the growing telematics market, which offers the likes of real-time data on vehicle location and driver behaviour tracking, helping boost fuel economy.
Yet as well as technological advances, there are also simpler methods of cutting fuel costs that are just as effective.
Driving behaviours such as using the handbrake at traffic lights and driving in the right gear both boost vehicle efficiency. A recent study for Barclaycard found that British drivers waste more than 636 million litres of petrol a year by not using such methods. In fact, some 36 per cent of drivers surveyed said they don’t use any eco-efficient techniques.
But it’s important to remember that, while fleets and their drivers can take some steps with short-term benefits, fuel prices ultimately dictate the lion’s share of spend in the long term.
As for how fleet managers can achieve savings, Paul explains: “There are two sides to cutting fuel costs systemically — ‘buying it right’ and ‘using it right’.”
In terms of buying, Fuel+ , a fuel payment card offered by Barclaycard and TMC, can significantly reduce cost. In fact, one customer, Chivas Brothers, predicted its mileage monitoring and reconciling features could save them as much as £80,000 in the first year of use.
Fuel+ comes with Chip-and-PIN technology, providing protection against misuse. It is accepted wherever you see the Visa sign, avoiding lengthy detours .
Chip-and-PIN technology is also more convenient than conventional fuel cards, letting drivers pay at unmanned sites, avoiding the need for additional mileage and allowing them to get back on their way quickly.
On the usage side, Fuel+ software closely monitors and reconciles driver mileage and fuel spend, discouraging inflated mileage claims.
What’s more, while total overall UK fuel spending may have increased, TMC’s customers have been cutting their mileage and fuel expenses. The company found its customers covered three million fewer business miles in February 2015 compared to February 2014, saving fleets almost £1 million at the pumps in the month.
As for the future of fleet fuel spend, despite a much-needed price-per-litre drop, this is unlikely to last. With prices currently under cost of extraction for many producers, price increases are inevitable if they are to stay in business.
Beyond this, advances in technology look likely to play a growing role in the long term, with corporate fuel spend set to become increasingly sophisticated.
“Telematics, mobile communications and corporate purchasing platforms are steadily converging,” Paul says. “This will enable forward-looking providers to develop powerful new tools for increasing the productivity of mobile employees.”
Discover how Fuel+ in conjunction with TMC can help your fleet save money .