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Fuel prices on the rise in March and April: what are the causes?

by Eleonora Malacarne on May 2, 2019 9:03:00 AM

Fuel prices on the rise in March and April: what are the causes?

Fuel prices have been on the rise leading up to Easter in both the UK and Ireland.

Fuel price data shared by the AA for UK consumers revealed that over the Easter period, the cost of fuel at the pumps reached a five-year seasonal high. Average UK retail petrol prices were 125.41p per litre, up 5.41p from last year, while diesel was 131.97ppl, up 1.65ppl in a month.

Regarding Ireland, while prices at the pumps dropped 1.4% between February and March 2018, they rose 1% in the same period this year and drivers faced higher prices at the pumps last month and Consumer Prices Index (CPI) rate of inflation was up 2% last month.

According to experts, CPI inflation is expected to be at or above the 2% target in all but two of the remaining months this year and is seen as one of the causes of the rise. Other global events that might have impacted fuel prices include the civil war in Libya and sanctions on Venezuela and Iran, but also better weather conditions in UK and Ireland may have stimulated the trading conditions of fuel and hence increased demand. Any sharp slowdown in demand that might have happened in March has changed in April, after the latest Brexit deadline was extended until October—reassuring consumers as to concerns about a Brexit summer cut-off and therefore encouraging them to spend (including on fuel).

With fuel prices on the rise, the onus is on fleet managers to find ways to spend less money on fuel and have the right fuel purchasing policy. With fuel being the lifeblood of any fleet, a number of possible saving opportunities are already available, like the optimisation of fleet journeys, training for safer and more efficient driving techniques which are focussed on anticipating hazards and reducing unnecessary fuel consumption.

 

 

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Topics: Fleet Costs, fuel prices, fuel management, onboarding

The A-Z series: F for fuel—the biggest expense in fleet management

by Eleonora Malacarne on Sep 20, 2018 9:00:00 AM

The A-Z series: F for fuel—the biggest expense in fleet management

It would be difficult not to immediately associate the letter F in our A-Z of fleet management series with the word “fleet”. But fleet is our overarching theme, so we need to find another topic of focus associated with the letter F, one that is a major expense for anyone operating vehicles commercially, at least for the time being—fuel.

Being an essential element for vehicles to run, fuel is at least for now, in fact, the largest contributor to fleet operating costs and for this reason subject to the most attention. With regards to fuel and fleets, fuel management relates to methods, tools, strategies and also best practices to use in order to maintain, control and monitor fuel consumption. Being the most essential element for vehicles to run means fuel consumption is unavoidable and something that is accepted unquestioningly, but on the other hand that doesn’t mean some serious thought cannot go into putting strategies in place to reduce consumption and, consequently, the sometimes frightening levels of expenditure.

When considering these strategies, there are different approaches regarding fuel itself:

How much do fleets pay for the fuel? This vital element in a fleet operation is not stable but depends on constant market fluctuations and trends that often cannot be predicted and alternate between periods of ups and downs, peaks and uncertainty. This has led to the investigation, by fleets, of a tool called ‘fuel hedging’, which is a contractual instrument used to reduce exposure to higher fuel costs by allowing a company to establish a fixed or capped cost, similar to the concept of hedging in currency and commodity markets where investment risks are managed.

How do fleets pay for the fuel? Though it might seem rudimentary, not all companies have switched to alternative payment methods such as fuel cards, but instead use, for example, cash or personal credit cards that is later reimbursed by way of an expense report, or they use company-provided purchasing or other credit card options, reconciled via an expense report. While these latter methods enable drivers to purchase fuel when it is needed, they will not really help the control and management of fuel by the fleet manager as they do not record mileage, place of purchase and other key data of interest. Fuel cards would help better manage fuel expense, especially if connected to a global fleet management system able to provide real time data on journeys and safety.

How is fuel consumed and how can consumption be reduced? It’s worth pointing out that often quite shocking levels of fuel consumption result from trips that aren’t strictly necessary. If you start tracking your fleet, you will quite likely discover unnecessary journeys or detours have been taken, or that more fuel efficient routes are available. How you drive also has a considerable impact as speeding and dangerous driving are closely correlated with global fuel consumption. Fuel theft, probably not the first thought that pops into the mind of trusting fleet managers, can also, unfortunately, become a factor that impacts on the bottom line. Monitoring the use of fuel via a digitalised system that integrates your fuel card and provides information on idling and dangerous driving patterns is a way for your business to be aware of how every drop of fuel is spent and act directly on the sources of fuel cost to cut consumption.

 

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Topics: Fleet Costs, Fleet Management, fuel management

Vehicles only reaching 80% of their official MPG, claims real fuel consumption website

by Eleonora Malacarne on Apr 3, 2018 9:00:00 AM

Vehicles only reaching 80% of their official MPG, claims real fuel consumption website

The website Honest John hosts a page called ‘Real MPG’ which gathers and publishes real fuel consumption data and highlights the gap between the official fuel economy data stated by vehicle manufacturers and real-world fuel consumption. According to their findings, the average vehicle delivers just 80% of the officially advertised fuel economy.


Real MPG began in 2011 thanks to the website Honest John, one of the most famous resources for vehicle buyers, which feature tips and professional answers to technical questions posed by readers. Because Honest John was receiving more and more complaints from buyers who could not reconcile the MPG of a vehicle used in a real-life setting with the MPG advertised by the manufacturer, it created this page specifically for vehicle buyers to submit their own MPG findings together with engine model and ‘type of driving’.


The debate on real versus advertised MPG and the reliability of vehicle testing is ongoing, though it has become more intense in recent years due to the gap between official and real MPG appearing to be on the increase.

The NEDC (New European Driving Cycle)—the official vehicle testing method for the last 40 years—has often been judged as incapable of simulating real-life driving as it is no longer compatible with modern engines or the stats are drawn from vehicles adjusted to obtain better results (allegedly). The Worldwide Harmonised Light Vehicle Test Procedure (WLTP) has come into force since September 2017 and is seen as a more realistic testing method—though it is still not exactly real-life driving—as it includes a greater range of driving situations (urban, suburban, main road, motorway), longer test distances and stricter car set-up and measurement conditions. From September 2018, all new vehicles will have to be certified under the WLTP. According to Real MPG, WLTP should be more reflective of real-world driving, but it is still laboratory-based and unlikely to return the realistic economy figures that buyers need.


But, apart from the vehicle testing, what exactly did the Real MPG discover? Apparently, just one in ten vehicles matched the figures quoted by carmakers in 2017. The worst performing car, according to Real MPG, was the Smart Fortwo which achieved 67% of its advertised fuel economy, followed by the BMW 5 Series and Land Rover Discovery Sport with both delivering just 68 per cent of their stated MPG. Best performing cars were the Land Rover Defender, with an average of 105%, followed by the Mazda MX-5 (102%) and the Toyota GT86, with a real-world fuel economy of 98%. In terms of commercial vehicles, the Ford Transit data collected in Real MPG demonstrated a real-world fuel economy of 78% in its 2.2 TDCi 125 variant and 67% in the 2.2 TDCi 155. The Citroen Berlingo 2018 demonstrated 93% in its 1.6 HDi 90 variant and 84% for the 1.6 e-HDi 90.


These investigations and debates around real-world fuel consumption do highlight that fleet costs and fuel costs are quite tricky to manage if you are too much influenced by advertised MPG because of the gap between the manufacturer’s claims and the real-world fuel economy. Driving style and maintenance is extremely important, and real-world MPG data is what counts at the end of the day. Best practices in terms of efficient driving, fleet policies controlling use of vehicles, driver training and appropriate maintenance that avoids wasted fuel have to be combined together with the monitoring of real fuel usage—cross-checking mileage and the cost of fuel used. Today you can manage fuel on a real case by case basis: let us know if you need to capture fuel data and run vehicles more efficiently.

 

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Topics: Fuel Economy, fuel management

Controlling your fleet budget: how to find money lost in fuel expenses

by Eleonora Malacarne on Sep 5, 2017 9:00:00 AM

Controlling your fleet budget how to find money lost in fuel expenses.jpeg

Fleet managers spend a lot of time dedicated to the control of the fleet budget. Fleet directors devote hours combing through budgets and expenses for opportunities to make savings. The idea is to focus on where money has disappeared. But there could be areas that aren’t properly considered due to lack of time and resources.

So when set to the task of controlling their fleet budget, where can fleet managers find money lost in fuel expenses? Fuel expense is no doubt the biggest cost fleets incur, but apart from the strictly evident fuel expenses checked while verifying fuel bills, where can further losses be looked for?

 

1. Fuel theft: there are a few ways in which fuel theft may occur. Despite the apparent lack of resources to do it, fraud might still happen. It might be your fuel is going somewhere and not necessarily into the fleet vehicle tank.


 
2. Purchases at the fuel station: if you have no regulation in your policy or in your fleet card settings, fleet drivers might just buy non-fuel items without you knowing it—have you ever wondered how much your drivers coffee consumption can add up to?

 

3. Fuel purchased on weekends: hopefully you already looked for this, but what about checking if all fuel purchases have been carried out during working time or if there are any particularly high expense on Monday/Friday—possibly the result of which is in breach of policy?

 

4. Cash payment: if you exclusively use fuel cards so as to avoid the distribution of cash to drivers, you won’t probably incur this. Paying by cash implies that anything can be counted as fuel: coffee, food or other items might be considered essential for the driver, but we need to determine what is absolutely necessary to power the vehicle rather than the driver.

 

5. Detours: if you had the opportunity to read one of our many articles on the subject, you might have seen how much impact detours make when considering fuel spend.

 

6. Unmanaged wear and tear or skipped maintenance: if you do not tackle vehicle issues or do appropriate servicing, chances are that you are spending more on fuel than you should.


 
7. What about driver behaviour? The driving style can seriously impact fuel spend.

 

Here’s some food for thought: it’s all about delving into fuel expenses more deeply—if you are unable to do this, check out how a fuel management system can assist by calling us.

 

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Topics: Fleet Management, Fuel, fuel management

How to save fuel while driving and having control of your fleet

by Eleonora Malacarne on Nov 16, 2015 9:00:00 AM

how to save fuel while driving

The management of a fleet of vehicles is subject to a number or variable factors that directly or indirectly influence the costs of the fleet. One of the biggest costs is in fuel needed to operate the vehicles, hence the importance of managing fuel and making savings wherever possible so that capital can, as far as possible, be invested into business growth.

 

Want to know how to save fuel while driving?

 

It might sound like a contradiction, but if all fuel related activity is adequately recorded—from the purchase to consumption—it is actually possible to save fuel while driving. If you have access to reports showing the consumption for each vehicle as well as purchases you can set up an effective action plan for saving fuel. Part of such a plan would be the implementation of a fuel policy and a vehicles policy.

 

How to save fuel while driving by setting up a fuel policy

 

It is paramount to set up an action plan that focusses specifically on fuel related activities. It must be created with a view to reaching the following objectives:

• get to know which are the most efficient vehicles and the ones which require least expense

• centralise knowledge and control of fuel consumption

• identify drivers who make the most efficient use of fuel because of their driving style

• lower global fuel consumption

 

What about the vehicles?

 

The data obtained will give us valuable, additional information to help us choose the vehicle that best suits the scope of our fleet. This will also help us to avoid escalating fuel and maintenance costs and the unnecessary expense of purchasing inappropriate/under-utilised vehicles.

 

 

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Topics: Fleet Costs, Fuel, fleet management costs, fuel management

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