Gas prices have doubled in the past two years. The increase in fuel cost has been hard for everyone but especially difficult for businesses with company vehicles that have to bear the brunt of paying high prices for their employees fueling up at the pump.
A combination of factors including global politics, labor shortages, and more of the workforce going back to the office have made the summer of 2022 much more than the usual gas price hike from summer travel.
For businesses that have company vehicles like construction companies and field services that utilize fleets, this is a part of the work that most business owners feel they don’t have much control over. But there are actually several steps you can take to control fuel costs for your company even in times like this. Let’s look at a few of the most impactful things you can do.
5 Ways to help your business save money fueling up at the pump:
Use a corporate card that gives rewards for fuel spend
Turn all of that fuel cost into some cash back into your business. Spending money on gas and diesel is inevitable to get work done, so make sure your employees are using a company credit card or corporate card that has great cash back for fuel spend.
When selecting a fuel card for your company, make sure you are calculating the cash back properly. Some cards advertise cents per gallon while others give a simple percentage back on all fuel spend. Our research shows that more companies are finding the latter to be more straightforward. Let’s face it, $0.02 per gallon doesn’t sound as nice when the price per gallon has doubled in the last two years. Wouldn’t you much rather get a flat percentage cash back, so as the fuel prices go up, so do your rewards.
Rewards at all stations are better than one network (ex: BP or Exxon). A fuel-specific card by a gas station brand that you recognize may seem like a good choice at first, but something to keep in mind is that these types of fuel cards are only going to give you rewards at their own branded gas stations. This can be inconvenient when it’s time to fill up and there isn’t one nearby. This is also an issue if the lowest price at the pump happens to be at a different brand’s gas station. For these reasons, look to a more general corporate card that is still a great solution for fuel.
Great tracking and management software should come with whatever fuel card you choose. This may be hard to find with traditional fuel cards, but good news that there are innovative solutions hitting the market. Smart credit cards paired with software that allows employees to enter mileage and other pertinent information via text message or within an app can be very beneficial to your company. Entering pin numbers and mileage at the pump is becoming a thing of the past which is good since oftentimes the pumps aren’t set up to receive this information. Everything can be done with a smartphone and is as easy as a text message if you choose the right corporate card.
Check out something like the new corporate card offered by Vendrix.It happens to be great for fuel. Vendrix is one of the best fuel cards for your company because the rewards are up to 1.75% which is very high compared to others, and you get cash back no matter which gas station you go to. The Vendrix solution allows cardholders to upload receipts and enter data like mileage simply by responding to a text message right after they swipe their card at the pump.
Become more fuel conscious
Be efficient with your business vehicle to control fuel spend. Remind your team to plan their work to minimize their drive time and cut down on gas and diesel costs for the company. This is part of creating a cost-conscious company culture that can help save money on a lot more things than just fuel.
Think about the reasons why your employees are driving across town. There are many but one could be to take things to and from an office or to go pick something up from one project location to be used at another location. Many companies share things like company credit cards. Using a smart credit card for your employees that allows you to implement controls and empowers cardholders to request more funds when needed can cut down on the time and fuel cost to drive across town just to borrow someone’s company card because maybe it has a higher limit or maybe you’re only using one card per project. Another effective way to cut down on frivolous errands is to utilize technology where possible. A good example is time keeping applications. In the not so recent past many companies were still using paper time cards. This may require a supervisor actually driving around to get the necessary paperwork filled out and delivered to the office for weekly payroll. Solve this problem with cloud-based project management software along with payroll applications where supervisors can use smartphones and computers to handle capturing and delivering data. In general, tools that help make your business more efficient which in turn will save on fuel costs.
Lead by example. Let your employees know that driving a company vehicle is a privilege and should be treated with respect to the company’s finances. Frivolous use of fuel is behavior that is not beneficial to an organization and should not be tolerated.
Operate and maintain your vehicles in the most practical way
Go the speed limit. Don’t push the pedal down excessively or start and stop abruptly too often. This practical driving behavior is not only safe, but also a great way to get the most out of your fuel economy. Miles per gallon are rated based on normal driving at the posted speed limits, so keep that in mind when operating your vehicles.
Maintenance is possibly one of the biggest factors that also seems to be the most ignored. Air pressure in your tires is very important to keep correct or else your vehicle will quickly burn more fuel than it should. Keeping clean air filters and staying current on scheduled maintenance are also important factors.
Fuel up on the right days and find the gas stations with lowest prices on fuel
Believe it or not, some days are actually better than others to fuel up your company vehicles. Studies show that Monday is actually the best day to fill up while the worst days are Thursday, Friday and Saturday. Don’t ask why, but that just happens to be the case. It could have to do with gas stations hiking prices at the end of the week knowing that most people will be fueling up for weekend plans and during the weekend they will be driving more and needing more gas. Don’t let your company vehicles fall into this trap. Make sure your team gets fueled up on the least expensive day possible, so look into it for your area, monitor the prices, and set the company policies accordingly to save money on gas and diesel.
Location makes a little more sense than day of the week if you think about some gas stations being in certain areas like busy thoroughfares that don’t have other options for fuel, or being in a wealthy zip code or even just a more affluent part of town. Gas and diesel prices will usually follow what’s around them, so check around town and find the best prices on fuel. A simple online search lets you know where the best priced gas is in your area. The internet also allows you to search by zip code, and city, so there is no excuse for anyone not to know where the best prices are on gas and diesel these days.
Implement a program where employees are rewarded for conscious fuel effort
This is simple and usually very effective if managed properly. You don’t want people making bad business decisions just to save fuel. Manage it properly and it will pay off for your company. An easy way to implement this type of program is to calculate everyone’s average monthly or weekly cost on fuel. Compare this to what the cost should be since you know roughly about how far each worker is driving everyday for company use.
Then determine a reasonable goal to cut down on mileage and fuel spend, say 10% less. You want this to be something attainable that will not cause your core business to suffer due to the decreased amount of vehicle use.
Finally, once individuals attain the agreed-upon goal, reward them with something like a gift card or company apparel. Maybe even a bonus on their paycheck or more approved time off. Sometimes the best thing is actually just to acknowledge their good doings and thank them for it. Doing this at company meetings where others are present is especially effective and also helps with the fuel conscious culture discussed earlier.
Why are gas prices so high?
The short answer is supply and demand. The demand for crude oil which is used to make gas and diesel fuel is greater than the supply.
Labor shortages and other labor-related issues also have a big impact on price fluctuations with fuel. These types of issues also affect other industries. For example, why flights are so expensive.
According to AAA, the most expensive gas in the US right now is in California followed by Illinois. The good news is that prices at the pump have decreased a little recently, but the US average is still double what it was 2 years ago when travel and commuting plummeted due to the COVID-19 pandemic.
Overall inflation within our economy is yet another factor that has contributed to an increase in gas prices. Due to all of this and with it being the busy summer season for most types of businesses coupled with summer travel, gas prices seem to be skyrocketing out of control. Fear not, as always markets will correct themselves if properly dealt with and the oil and gas industry is no different. The best thing is for everyone to be smart about their fuel consumption and do their part to help ease the supply and demand issues.
What is this news about a ‘gas tax holiday’?
A gas tax holiday is something that was proposed by the White House back in February. This is not the first time that a tax relief on gas has been done. It has been done at other times for example when the Colonial Oil Pipeline was hacked.
How much would it actually save? Let’s do the quick math. If a gas tax holiday saves $0.20 per gallon (the proposed amount is actually 18.4 cents per gallon) assuming gas is $5 a gallon and it takes 20 gallons to fill up a company vehicle and you fill up once per week, then that would save an average of $4 per week for that one company vehicle. It’s easy to multiply that out to $20 per month, but keep in mind the gas tax holiday would only be for a few months at the most.
As you can see, a corporate card with great rewards on fuel can save your business far more than a gas tax holiday in the long run.
Another impulsive thought when it comes to high fuel prices is switching to electric vehicles. This sounds great in theory but should be viewed as a more long term solution. Spending $50,000 on an electric or hybrid company vehicle to solve a $5 per gallon gas price is not the most economical option in the short term.
In summarizing the points above, practical realistic solutions that can be implemented in the short term are the best approach for battling the current high fuel prices.
Accompany a great fuel rewards corporate card with fuel conscious behavior and tools that help make running your business more efficient for the trifecta of fuel savings during these times of high prices at the pump.