MANAGING fuel consumption can have a drastic effect on costs, as Thames Water has recently proved.

Installing a fleet management software system enabled the firm to cut consumption by 161,000 litres through planning and analysis of routes and practices.

At £1 a litre, that makes a considerable saving of £161,000 since last year, equating to 10% of the firm’s fuel for its 1,200 vehicles.

As a result of the savings, carbon dioxide emissions have been reduced by approximately 429 tonnes, which forms part of a drive by Thames to minimise greenhouse gas emissions.

Thames and software firm DigiCore began developing the system last year to help the water company increase productivity and efficiency and reduce overheads.

Meanwhile, Colin Matthews, head of TransportEnergy Programmes at the Energy Saving Trust (EST), believes rocketing oil prices could force fleets to consider alternative fuels such as liquefied petroleum gas (LPG) and hydrogen sooner rather than later.

He said: ‘At some point, rising costs are going to hit levels at which the alternatives to the use of oil will be financially sustainable. The market will adopt alternative technologies in transportation. But then follows the questions: which technologies and who is at the forefront of bringing them to market?’

Hybrid cars, while still using petrol or diesel, use electric motors in tandem with internal combustion engines to improve economy. Toyota, Honda and Lexus already have hybrid cars on the market, and numerous other manufacturers have such models in development.

The Government has promised that biofuels – made from sugar-beet, wheat and oil rapeseed – will play a key role in its strategy.

Transport minister Stephen Ladyman said he hopes new rules forcing oil companies to include a percentage of biofuels in road transport fuel would be announced by the end of the year.