Rising oil prices put onus on robust fuel management

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Fleets should ensure they’re using robust fuel management measures to help counter rising oil prices.

Sue Branston, country head of Fleet Logistics UK and Ireland

So says Sue Branston, country head of Fleet Logistics UK and Ireland as she outlines a number of ways that fleets should take action to cut costs.

AA figures show the cost of fuel at the pumps reached a five-year seasonal high over the Easter period, with average UK retail petrol prices hitting 125.41p per litre, a rise of 4.4p per litre inside a month and up from 120p per litre this time last year.

Meanwhile, the average retail price of diesel is now around 131.97p per litre, a rise of 1.65p per litre in a month and the highest price for diesel at this time of year in the last five years.

There has also been an impact on base oil prices since the UK voted to leave the EU in June 2016. Oil is sold in dollars around the world and, since Brexit, the value of the pound has declined steadily against the dollar.

Sue Branston said: “Fuel is the largest day-to-day operating cost on the company fleet and often the control of the price paid is in the driver’s hand. Even supermarket pricing, typically the cheapest retail purchasing opportunity, can be more expensive than a negotiated corporate deal on a set weekly rate directly with the source, the oil companies themselves, in some instances.

“There are many solutions available, but fuel is a complex commodity and truly needs to be understood in terms of the supplier offerings and all the hidden charges, such as transaction costs, and not just the price of fuel itself.

“Fleet Logistics UK works with a number of suppliers to provide corporate clients with solutions to save money, without impacting the driver. For example, with one client which operates a fleet of more than 2,000 HGVs and cars, we have introduced a change in fuel strategy which has led to a forecast saving in excess of £120,000 per annum,” said Branston.

However, Branston added that, arguably, the most effective way to reduce fuel costs and cut the corporate carbon footprint is to reduce the volume of business journeys made, by allowing people to work from home or using online or phone-based meeting technologies to reduce the need for travel.

Branston said that monitoring driver behaviours and identifying which drivers were regularly paying too much or driving too inefficiently could also help control costs.

“Fleet managers should also consider techniques such as efficiency driver training, which teaches drivers techniques for conserving fuel and anticipating road hazards and which has been shown to clearly reduce fuel consumption and costs.”

Branston also said fleets should look at downsizing or rightsizing vehicles to more fuel-efficient alternatives where possible while ensuring they’re still fit for requirement.

“In urban areas, pure electric vehicles may be a consideration, but again their suitability for the task in hand bearing in mind the range required will also need to be factored into the decision,” she said.

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Natalie Middleton

Natalie has worked as a fleet journalist for 16 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.