Fuel Management

Elements of a Comprehensive Fuel Management Program

A well-designed fuel management program controls costs, improves driver productivity, meets regulatory requirements and organizational policy goals, and provides for the collection of essential data and production of management information.

January 2011, Government Fleet - Cover Story

by Randy Owen

Operating one or more on-site fuel stations has pros and cons. While purchasing fuel in bulk takes advantage of volume price discounts, operating fuel site stations also comes with environmental liabilities.

 

Most government fleet managers oversee fuel, as well as vehicles. While fuel is one of the largest fleet operating costs, the volatility of fuel prices over the past few decades has led some government fleet managers to develop a fatalistic attitude regarding fuel costs and a passive approach to managing fuel. Since fuel prices have spiked in the past and are bound to do so again in the future, government budget directors are accustomed to having to supplement the fleet budget when prices go up. Consequently, some fleet managers see managing fuel costs as a lower priority and focus their attention on other issues.

However, savvy fleet managers know there are several steps they can take to reduce fuel use and costs. A well-designed fuel management program controls costs, improves driver productivity by maximizing easy access to fuel, meets regulatory requirements and organizational policy goals, and provides for the collection of essential data and production of management information.

What's the Policy?

Surprisingly, research shows few government fleets have a formal fuel management policy. Such a policy should define:

  • Goals of the program (i.e. providing ready access to fuel, ensuring fuel is available during emergencies, cost control, environmental stewardship, etc.).
  • Structure of the fuel program (i.e., bulk fuel and/or commercial fuel cards).
  • Organizational responsibilities.
  • Applicable regulations and how they will be met. 
  • Driver accountability and responsibilities (e.g. no premium fuel, accurate recording of odometers, etc.).
  • Safety and security.
  • Any policy goals enacted by elected officials (such as reducing petroleum use and the jurisdiction's carbon footprint).

Once a policy is place, the organization should develop a strategic fuel plan that specifically defines how policy goals will be met. For instance, the policy may include a statement that ensuring sufficient fuel supplies during emergencies is important for the organization. The strategic plan will define precisely how this will be accomplished. The plan should be updated annually, whereas the policy can be reviewed every few years and updated as required.

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