10 jan 23

10 quick and easy ways to cut fleet fuel bills

Deliver immediate savings to the bottom line with these cost saving ideas.

While the future of fleet looks certain to be electric, here and now energy expenditure remains dominated by petrol and diesel. Even in the most ambitiously green fleets, electric vehicles represent only a quarter to one third of vehicles, which means maintaining focus on minimising fossil fuel bills is vital for controlling fleet costs.

1. Negotiate lower prices

Direct fleet fuel spend through a preferred oil company and the pump price can be significantly lower than the cost advertised on the forecourt. Oil companies will offer volume related discounts (these are common in the heavy commercial vehicle world), with savings of up to 12 cents (10 pence) per litre of diesel. Giving drivers fuel cards is an easy way to boost compliance with preferred procurement partners.

2. Ban high cost filling stations

The pump prices at motorway service stations can be as much as 25 cents (20 pence) per litre more expensive than average petrol or diesel prices, so it pays to direct drivers away from these expensive refuelling options. Supermarkets typically offer the cheapest fuel, and many will accept fuel cards.

3. Use a fuel card

Make sure the business is only paying for petrol or diesel, and not reimbursing expense receipts that include coffee and snacks. Fuel cards can restrict purchases to fuel (or can be relaxed to include AdBlue and lubricants). Fuel cards can also offer cashflow advantages, deliver efficiency gains by consolidating spend into a single invoice, and facilitate VAT recovery. 

4. Consider bunkering

Given the phase out of internal combustion engines over the next few years, few fleets will be looking to install their own fuel tanks at their depots. However, it is still possible to ‘bunker’ fuel, buying it in advance at competitive, commercial rates and then refuelling from any participating oil company forecourt in the bunker network.

5. Scrutinise fuel expenses

A fuel card is no guarantee on its own of controlling fuel spend. Fleet departments still need to audit every refuelling incident to check, for example, that the volume of fuel drawn does not exceed the capacity of the vehicle fuel tank, and that the volume of fuel used tallies with a vehicle’s mileage.

6. Examine mileage reports

Fleets that only reimburse business miles need to check mileage claims. Easy to use apps (such as TMC’s Mileage+) as well as telematics systems can help drivers to record the exact distance of each business trip, but employers still need to look out for exaggerated claims. An expense form where every journey ends in a five or zero suggests that the driver is rounding up the claim.

7. Reimburse actual costs

The simplicity of fixed mileage reimbursement rates is appealing, but the fairest system for both employer and employee is to reimburse drivers the exact fuel costs of business miles in a company car or van. This demands accurate record keeping of both fuel spend and business trip distances.

8. Monitor driver performance

How a vehicle is driven is a huge determinant of its fuel consumption. Armed with fuel card data, fleet managers can identify drivers with the worst fuel economy, and try to improve their performance through coaching and technology such as Lightfoot, an in-vehicle device that alerts drivers immediately to incidents of poor driving (such as harsh acceleration) and rewards good performances.

9. Plan journeys

Every unnecessary kilometre costs a kilometre’s worth of fuel, so using route planning software to plot the shortest and most efficient (lowest traffic volume) journey saves petrol or diesel. Logistics giant UPS's latest dynamic ORION route-planning software gives its drivers reoptimised route directions, based on changing traffic conditions, and reckons it is saving 3.2 to 6.4 kilometres (2-4 miles) per vehicle per day. These savings are on top of the 12.8km (eight miles) saved by the original ORION, which has enabled UPS to save 10 million gallons of fuel per year.

10. Avoid the journey

Some of the world’s largest companies have retained the strict travel bans they introduced during Covid-19, restricting business travel expenses to just 25% of pre-pandemic levels. While these restrictions largely apply to flights and hotels, the same logic suggests that video calls and online conferences can reduce the need to travel.

Image: Shutterstock

Authored by: Jonathan Manning