?Diesel Fuel Prices Up Again, Fleet Management Must Meet Challenge
Do we sound like a broken record now that diesel fuel prices have gone up nine straight weeks? Your fleet fueling costs may not have hurt as much as usual this week with only a.8 cent increase to $3.438 a gallon nationwide. But, how does it feel to know that diesel fuel prices are 65 cents higher than this time last year? Ouch. Listen fellow fueling cost watchers, the gloves are off! Where are your fleet fueling costs going to go? One word, okay, maybe it’s more like several words, Egypt. Middle East. The increase in crude prices is already up $6 a barrel since this new twist to your fleet management budget started to unravel on January 1, 2011.
A week or so ago, you may have thought that your fuel management system might get back into shape because crude oil had gone down from $95 to $86 a barrel, and diesel prices would follow in the next few weeks. Hold your fleet fueling card tight. With crude oil back over $92 as this article is being written, this might be the straw to push the $100 a barrel crude back into the picture. Ouch again.
I know you sideline watchers give the old Eeyore. You think, “”What can I do with my fuel cards and fleet cards to reduce fueling cost? My mobile fueling price is good. We have been using the same fuel companies for years they take care of us. I think I save.”” Well, to all that I say, sure, sure, sure — get your head out of the Arab sand!
Let me ask you something else. When do fuel, fuel card, fleet card, mobile fueling and major oil companies make the most money? The answer: when fueling prices are higher! Why? Because, it is a lot easier to take a couple of cents a gallon on a product that is $3.50 than a product that is $2.75. Fuel card, fleet credit card services and fleet card companies make their money off of a percentage of the sale. Is it better for your fuel card company when fleet fueling prices are $3.50 or $2.75? Figure that depending on what fleet card(s) you are using, someone is getting paid 1.5% to 2.9% of the sale. Oh yes. What truck stop, mobile fueling company, or card lock company can afford to pay 2.9% of the total fueling sale and still remain in business? Maybe we should ask WEX. Yes, the same WEX (Wright Express) that provides you with all of those wonderful reports, and says that you need a fuel manager and two assistants to review the information because it’s just a whole lot of information. I’m not here just to pick on WEX or Voyager. Fleet cards and fuel cards make more money on higher prices. Are your fleet management services going up too because the price of diesel is going up?
Listen, your company is busy working hard to make a splash in this tough economy with a fleet fueling market that is nuts. Ask yourself: Does your fleet manager or fuel manager really have the time to put together solid fleet management solutions that will create cost savings? Does the fleet manager or his staff have access to the right fueling data to know which way is up? Do you consider that you might have fuel theft going on? Well, you won’t find out unless you put the right fuel management programs in place.
The time to take action to establish your fleet management and fuel management plan was months ago, but don’t Eeyore it and put it off until diesel fuel prices reach $4.00. Take steps now. Hire a fleet management consultant to get your management systems in line, and make sure your fuel inventory management is working. A little invested now, will save a lot down the road. Trust me.