Fuel Management

Budgeting for Today's Fuel Costs

Volatility in gas prices has made creating fuel budgets a tough job. Fleets share their ideas and best practices.

March 2009, Government Fleet - WebXclusive

by Mike Scott - Also by this author

Just using the words "budgeting" and "fuel costs" in the same sentence sends shudders down the spines of most fleet or purchasing managers responsible for estimating such costs.

The fluctuations of fuel prices experienced in 2008 - from a high of $4.14 per gallon retail for gasoline to a low of $1.60 in a span of roughly four months - certainly have made estimating fuel costs tougher.

While such a broad range of prices isn't expected in 2009, due largely to the worldwide economic recession currently putting a crimp in demand, expectations are that fuel costs have hit a floor and will rise as the weather warms around the country.

So what's a fleet manager to do?

Saving Money by Hedging Fuel Expenses

Bruce MacLean, fleet manager for Charlotte County Sheriff Office in Florida, doesn't have to worry about fuel costs, although he does budget for the sheriff department's expenses. His department purchases fuel directly from Charlotte County, which secured a fixed-fuel price several years ago as part of a long-term contract that has helped keep departmental fuel costs at comparatively low levels.

With the extreme volatility in fuel prices in 2008, Charlotte County agreed to alter its fixed price costs, mainly so the fuel distributor could stay in business and cover costs, MacLean said. However, even then his department was paying an average of 50 to 70 cents less per gallon than many other governmental entities at the adjusted, non-tax price.

"The adjustment the County made was based on spot prices. This long-term vision our County held dates back several years before I came here," MacLean said. "It has been a tremendous benefit for us, even during these times of [escalating] fuel prices.

In fiscal year 2008, Charlotte County Sheriff Department fleet vehicles were driven more than 6.33 million miles. With the lower fuel costs of the long-term fixed price agreement, the department continues offering its law enforcement officials take-home vehicle privileges, something not possible with higher fuel costs, MacLean said.

"Some departments have had to make much tougher decisions than us, such as eliminating take-home vehicle benefits altogether or limiting the number of miles fleet vehicles may be driven for each shift," MacLean said. He knows of some departments that have required two officers to share one vehicle.

Budgeting a Flat Fuel Rate Provides Cushion

Palm Beach County Fleet Management Division Director Douglas Weichman budgeted $3.50 per gallon for  fiscal year 2009 -October 1, 2008 to September 30, 2009. He first submitted a draft fuel budget in March 2008, before the huge upturn in fuel prices last summer and subsequent drop-off in late fall. 

This strategy allows him some cushion if fuel prices remain comparatively low for an extended period of time. Weichman's budget was based on predictions of how many gallons will be used in the 12-month span. 

The three types and amounts of fuel Weichman purchased in last year's budget included nearly 1.1 million gallons of diesel fuel at an average cost of $3.51 per gallon. In 2009, a large percentage of diesel fuel the County uses will be biodiesel, expected to include more than 3.1 million gallons of B-10 gasoline at an average cost of $3.25 per gallon. In addition, 119,000 gallons of Jet A fuel at an average of $3.35 will be used to fuel helicopters.

One strategy Palm Beach County uses is setting up rates that include a reserve fund. Weichman is currently working on the 2010 budget, and despite the recent plunge in fuel prices, he is considering budgeting about $4 per gallon for all fuels.

"It's impossible to predict fuel costs for a 9-12 month period," Weichman said. "It's better to be conservative." 


  1. 1. Vladislav Yakov [ February 12, 2018 @ 03:52PM ]

    We Can supply Aviation Kerosene,Jet fuel (JP 54-A1,5), Diesel (Gas Oil) and Fuel Oil D2, D6,ETC in FOB/Rotterdam only, serious buyer should contact or if you have serious buyers my seller is ready to close this deal fast contact us below:now base email us ([email protected])


    Russia D2 50,000-150,000 Metric Tons FOB Rotterdam Port.

    JP54 5000,000 Barrels per Month FOB Rotterdam.

    JA1 Jet Fuel 10,000,000 Barrels FOB Rotterdam.

    D6 Virgin Fuel Oil 800,000,000 Gallon FOB Rotterdam.

    E-mail: [email protected]
    E: [email protected]
    E: [email protected]

    Best Regards
    (Mr.) Vladislav Yakov
    Skype: neftegazagent

    Thank You

  2. 2. Vladislav Yakov [ April 23, 2018 @ 04:32PM ]

    We are please to inform your esteem buying company the petroleum products you are looking for is available in our storage tanks and reservoir for immediate delivery. Such as:

    1) D2 DIESEL GAS OIL L-0.2-62 GOST 305-82.
    3) JET FUEL JP54
    4) JET FUEL JPA1

    Provide your official email or contact us via email to enable us issue our official soft corporate offer (SCO).Thanks.


    E-mail: [email protected]
    E: [email protected]
    E: [email protected]
    Skype: neftegazagent



Comment On This Story

Comment: (Maximum 10000 characters)  
Leave this field empty:
* Please note that every comment is moderated.


Fleet Management And Leasing

Jack Firriolo from Merchants will answer your questions and challenges

View All


Public Fleet Tracking And Telematics

Amin Amini from Verizon Connect will answer your questions and challenges

View All


Fuel Management

Bernie Kanavagh from WEX will answer your questions and challenges

View All


Recent Topics

Is a bachelor's degree truly necessary in order to become a fleet manager, or does achieving certification as a CAFM or equivalent carry...

View Topic

We are in the middle of standardizing PM process with all of our technicians. And I'm asking if anyone has a standard pm checklist for...

View Topic

Fleet Documents

1134 Fleet Documents (and counting) to Download!

Fuel Saving Strategies Survey

View our 2008 survey to benchmark your fleet's fuel and green strategies with other fleets.

Fuel Calculator

A managed fuel program can help you save time and money and gain control over the way you fuel your vehicles. Determine your potential savings by using our fuel calculator.
Launch Fuel Calculator 

Fuel Prices

U.S. Gasoline and Diesel Fuel Prices.

Launch Fuel Prices 
Sponsored by

Founded in 1954, the Car and Truck Renting and Leasing Association (CATRALA) had as its credit "To promote sound public policy with respect to the leasing and renting of motor vehicles without drivers."

Read more