If you manage a business or administer a budget for a government agency on the state or local level, how much is your fuel budget? Do you ever have any left over at the end of the fiscal year? Or do you find yourself playing the budgetary shell game because you need to rob Peter to pay for Paul’s fuel needs? Chances are, this resonates with a lot of our business readers out there. Everyone is doing more with less. And whether you have a set allotment of funds for the year and simply treat fuel use as a fluid line items, your bottom line is no doubt affected by things like fraud and inability to account for how gas prices change from day to day.
Fraud is a major loss nationwide from fuel budgets, and can be as simple as unscrupulous employees nicking fuel to the indirect impact of signing up for a fleet fuel rewards program and then not getting the full rebate. Surprising but true, Pilot Flying J was raided by the federal government in April 2013 because of suspicions that they were improperly defrauding their customers (is there any other kind of fraud beyond improper) by messing with the rebates those fleets were supposed to be getting back. That may not sound like a big deal, but apparently the news resonated across the landscape. Almost one-quarter of all fuel or fleet managers surveyed say the scandal changed the way they purchase their fuel.
Wholesale fuel buyers have to contend with volatility in the fuel price landscape. Those of us who buy fuel have to lock in a given price for, say, 6000 gallons of gas to be used by our organization in the foreseeable future. What happens if the cost of gas drops by 3 cents the next day after purchase. Fleet and fuel managers will track fuel prices to try and make the best decisions. But inevitable mathematical mistakes pose the potential for thousands of dollars in extra expense.
Of course, it also matters how you take care of the fuel you’ve got. After spending thousands or tens of thousands on stored fuel, you expect to get what you need out of it. So good housekeeping practices to make sure stored ethanol gasoline doesn’t phase-separate, or that diesel fuel storage tanks stay microbe free – this is always a good investment. Spend a little bit in preventive maintenance to protect a fuel investment worth hundreds or thousands of times more.
Another thing you can do as a fuel manager or decision maker is to consider the octane or cetane level your vehicles use. Many kinds of cars, like police cruisers, are traditionally run on higher octane fuels, if only because of the perception that they “need to always run their best”. It might be a good idea to take a survey of the vehicles you have and make sure the fuel being provided actually matches what they need. Running a car on premium fuel when the engine is designed for regular-grade is just money going down the drain. And there are fuel treatments that can also help vehicles “on the verge” run like champs on low-grade gasoline when they used to be run on mid- or high-grade gas before. Or help diesel engines run smoother and quieter and with more power. The cost difference there can be on the order of 15 or 20 cents a gallon. That’s big money for a fuel budget, no matter if you’re the decision maker for a municipality or a private business.
If you’re in the New Jersey area, stop by the NJLM Show November 18-20 and say hello. We will be there. Hope to see you too!
Check out these posts about fleets:
- Diesel fuel lubricity trends for fleet and business
- How to Prevent Diesel Fuel Contamination
- Fleet Fueling Mistakes to Avoid
This post was published on November 17, 2014 and was updated on February 27, 2019.