Driving fuel efficiency is key to keeping fleet costs under control

The price of a barrel of crude oil has almost doubled in the last year or so, increasing from $60 to stand at around $120 when Employee Benefits went to press. Although it has fallen back a little from an all-time high of more than $140 in June, some experts predict this will be short lived and that, in the long term, demand for crude oil – currently boosted by the needs of the growing economies of India and China – will be such that the price will increase to $200 a barrel in the next few years.

With high fuel prices apparently here to stay, employers would be wise to consider the steps they need to take to manage their fleets more efficiently.

A quick win is to ensure that employees only undertake business travel by car where it is absolutely necessary. Instilling the importance of route planning to keep mileage to a minimum is also a sure-fire way of cutting the fuel bill.

Employers should also review the type of vehicles that are being used by drivers on business. However, if choice is being left to the employee, then it makes sense to either restrict the type of vehicles on offer or to provide staff with incentives to opt for fuel-efficient models.

In terms of the number of miles covered per litre, diesel-powered vehicles are more efficient than petrol, but the rising price of diesel may well mean that this option is not as attractive as it once was. Petrol-electric hybrids are another alternative. Although cheaper to run, they tend to be more costly to buy. Another option is converting an existing vehicle to one that is powered by liquefied petroleum gas, which is cheaper than petrol and diesel.

The sooner though that car manufacturers start producing attractive, fuel-efficient, green vehicles at sensible prices the better. Not only will employees, in the long term, stand to gain from cheaper company car tax on such vehicles, but also employers will be able to benefit from future changes to capital allowance tax relief that penalise gas guzzlers, as well as from reduced fuel bills.