Fuel hikes needn’t put fleet bosses over a barrel

Persuading staff to be more frugal and introducing greener and cheaper alternatives to petrol can help control fuel costs

With the price of crude oil breaking the milestone of $100 per barrel at the beginning of January, cutting fuel consumption has never been a more pressing issue for fleet managers. The good news is that there is a plethora of ways to manage fuel consumption, from limiting vehicle choice to persuading staff to be more frugal.

The first step to getting a handle on energy consumption is conducting a thorough fuel analysis. David Stanley, head of business development at Carillion Fleet Management, says employers should keep records of vehicle miles, and fuel spends per driver and per vehicle. Once the data is captured, they should then work out the cost per mile for the different vehicles and drivers across their fleet.

Stanley explains that an armoury of fleet gadgets can help employers keep track of miles. “Technology is available to track private and business mileage accurately. This will be an option as soon as the will of organisations and the acceptance of drivers has been established,” he adds.

The speediest route to a fuel-efficient fleet is picking greener car models, says Mark Chessman, deputy managing director of Lloyds TSB Autolease. “Once a vehicle has been chosen, there is only so much that you can do to reduce the amount of carbon dioxide and other pollutants it will emit. That’s why fleet policies that restrict or incentivise vehicle choice are the best way to manage the consumption of fuel”

As a general guideline, smaller cars burn less fuel than larger cars, and diesel vehicles guzzle less than those with petrol engines, particularly when driving long distances. The diesel Audi A5 3.0 TDI Quattro, for example, can squeeze 39.2 miles out of a gallon, while the petrol version, the Audi S5, only does 22.7 mpg.

Hybrid vehicles

Hybrid cars are even cheaper than diesel to run, combining electric and petrol engines to increase efficiency. Less appealing, however, are the higher prices: hybrids cost £1,000 to £3,000 more than conventional vehicles. An accurate picture of different vehicles’ consumption figures can be found at the Vehicle Certification Agency’s website on car fuel at www.vcacarfueldata.org.uk

One employer striving to be more environmentally friendly is healthcare provider HSA. Mark Bradbury, fleet manager, says: “HSA made the decision to reduce CO2 emissions by moving to diesel only.” Since the move, three years ago, the company has slashed its average CO2 output from 177g/km to 152.8g/km per vehicle.

Drive smarter

Other options include cars powered by liquefied petroleum gas (LPG), biofuels or electricity. The Employee Benefits/SureFleet Fleet Research 2008 found that 2% of employers have introduced LPG cars and 7% other ‘green’ fuel-powered cars in the last year.

However, it can be hard to locate filling stations for some alternative fuels. Nevertheless, the government is set on making ‘green’ fuel-powered cars more attractive from a tax perspective. From April, it is introducing a new 2% car tax reduction for cars manufactured to run on E85 fuel (85% ethanol and 15% petrol).

Teaching employees to drive smarter also helps to reduce fuel consumption. Employers can invest in driver training sessions, where staff learn tips for smoother, and safer driving. Taking simple measures, such as keeping tyres correctly inflated and switching off air-conditioning, can save thousands of pounds.

The alternative is to hit company car drivers where it hurts: in their wallets. Robert Kingdom, head of marketing at Masterlease, says: “Getting rid of higher reimbursement levels for drivers of bigger cars could dissuade people from choosing higher fuel consuming cars. It may also help reduce mileage, whether in a company car or own vehicle.

“If free private fuel is still offered, in most cases replacing this benefit with a fixed allowance is more cost effective for the employer and employee and this can reduce mileage.”

Fuel alternatives†

Liquid petroleum gas (LPG): The advantage of LPG is that it typically costs half the price of petrol or diesel and produces 10% less CO2. On the downside, LPG suppliers are scarce. To locate LPG filling stations, go to www.energysavingtrust.org.uk/fleet/vehicles/alternativefuels/alternativefuelsrefuellingmap/

Biofuels: Biofuels are produced from biological, renewable sources such as sugar cane and rapeseed. As long as crops are replaced these biofuels are considered to have zero emissions, because even though they generate carbon when burned in a car, they absorb a similar amount while growing. Again, filling stations can be hard to find.

Electricity: Manufacturers in general have failed to develop mass-market electric cars; currently the G-Wiz is the only model available in Britain. While not practical for most employers, it’s tax efficient and cheap to run.

Back to ‘How to manage a green fleet