Fleet News

Easy guide: How to take control of your fleet’s fuel expenditure

Further fleet advice from Colin Tourick’s Managing Your Company Cars in Nine Easy Steps

How can you ensure you pay the lowest price possible, minimise fuel con-sumption and pay only for fuel used for authorised purposes?

This is quite a tall order.

Fortunately, tools exist to help you.

Cost control is achievable only if you have information.

Unfortunately, for many companies, fuel information is available only through analysing scraps of paper (petrol receipts) and trying to make sense of what they say – a thankless task.

The first step to getting control is to use a fuel card. These are used much like credit cards, as the driver presents the card at a filling station and the cashier swipes it through a reader.

Fuel cards can be configured for use by a named driver and/or specific car to cover fuel only, fuel and oil, or both.

It can be stipulated that vehicle mileage must be entered at point of sale.

You will receive one invoice (usually weekly, fortnightly or monthly) showing all fuel expenditure.

Additional reports are available (often online) and it is through these that you take control of your fuel costs. Reports can show, by driver or by car:

* Price paid per gallon/litre, which allows you to target drivers spending more than they should

* Current mileage of each car to ensure that vehicles are serviced at the correct time/mileage

* Mileage per gallon/litre for each vehicle – helps spot
drivers who could drive more economically

* Exception reporting – shows where fuel consumption is varying from the norm

* Suspect transactions reporting – highlights missing, dubious or inaccurate information.

Fuel cards are an efficient way to collect all fuel expenses on one invoice.

They are also a form of credit.

There is no need to give cash advances to staff to cover fuel costs and no need for them to use up their personal credit card limits on company fuel.

When the company is paying for all of the driver’s fuel (both business and private), fuel cards work well.

However, many companies have stopped providing free private fuel because the tax payable by most drivers exceeds the benefit.

This has made many businesses think again about providing fuel cards.

They have had to choose between either continuing to provide fuel cards and requiring the driver to submit a form analysing mileage between business and personal, or discontinuing the use of fuel cards completely and requiring the driver to claim for business mileage driven.

The general view in the fleet industry is that fuel cards provide such a valuable management tool that they should be retained.

The company pays the entire fuel card bill then deducts an amount from the employee’s net salary for the cost of the private fuel used.

Employees sign a form authorising this deduction.

Fuel cards cost little or nothing.

The fuel card companies pay less than the pump price so they can afford to give free fuel cards to their larger clients.

If you have a big fleet they may offer you a discount off the pump price, too.

It may be only a fraction of a penny per litre but if you buy a lot of fuel this can add up to a tidy sum every year.

There are few fuel card operators in the UK compared with, for example, the United States.

If you want a card that can be used on the Continent there are fewer still.

So while in theory you can shop around, in practice you will be surprised how small your shortlist will be.

Fuel cards are good but not perfect. If you want to ensure that your fuel is going only into your employee’s company car, not their spouse’s car, you can have their company car registration number embossed on the card.

Some garages check the number but many do not. In fact, at large motorway filling stations it is doubtful whether the cashier could see the number plate even if they tried.

The cards can be configured so that mileage is captured at the point of sale but if the driver doesn’t provide mileage cashiers know they can just key zero in the mileage field to complete the transaction.

Notwithstanding their limitations, fuel cards are a valuable addition to the fleet manager’s toolbox.

  • The article here is an abridged version from Managing Your Company Cars in Nine Easy Steps, published by Eyelevel Books in association with Daimler Fleet Management.
  • Fleet News readers can purchase the book for a special price of £12 (retail price £15) by logging on to www.tourick.com and entering promotional code 1598.
     

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