Fuel price increases can greatly affect your business, driving up the pressure and strain on operational processes. When fuel increases, so do the business expenses, leading to a dip in your profit margins. It’s important that you adopt strategies to keep your business afloat in these times.
With diesel prices hitting staggering highs, South African fleet operators are now seeing fuel make up 35% to 55% of total operating costs, bringing the cost of a typical long-haul journey, like Gauteng to Durban, by over R2,000 per load. Take a look at our FAQ to see how you can save in your business.
Factors like import costs, taxes & levies, international tensions, and general global demand impact the price of fuel. Here’s how:
Global demand will cause the prices to fluctuate.
Import costs will typically be higher, especially when the demand is greater.
Government-imposed taxes and levies will constitute the price you see when you go to the petrol station.
International tensions will affect the transportation of oil and, therefore, its availability and price.
The volatility of fuel is typically directly linked to supply and demand. In simple terms, oil suppliers can’t simply get or make more oil, and consumers don’t use less oil, so the only thing to do is to greatly increase the price when the demand is high. This is why there’s so much volatility in price, especially when there are interruptions in supply.
You can really save on fuel costs in your fleet business by implementing a powerful and smart fleet platform. This platform can help you:
Optimise driver routes
Keep track of fuel use with fuel probes
Get detailed diagnostics and insights from telematics
Monitor driver behaviour (and identify patterns of bad, fuel-wasting habits)
Reduce idling
Proactively manage vehicle maintenance
Yes, a fuel management system really does help with fuel savings. Fuel management systems have been proven to help significantly reduce fuel waste, helping you identify problem areas, understand consumption patterns, and stop fuel theft and card fraud.
Cartrack’s system differs from other fuel management systems in that everything is in-house, and our fuel management solutions are sophisticated. Our hardware is all directly linked to our software, which ensures that anomalies are flagged immediately (card fraud, fuel theft, etc.) and you’re notified. We also have features like driver scorecards and AI-backed systems for the most accurate insights.
If the petrol price doesn’t come down, you can do the following as a business owner:
Maximise available technologies: An advanced platform like Cartrack’s FleetWeb will give you tools to save money. Route optimisation, fuel management, predictive maintenance, and more will help you manage fuel volatility.
Revisit rewards programmes: Many banks linked to businesses like yours have rewards programmes for fuel use. See how much you can save with bulk fill-ups.
The best technology to help manage fuel expenses is a fuel management platform, or a fleet management platform that has a fuel management component. The latter is your best bet, because it’s fuel management with the added factors of telematics and AI support. The insights you’ll get will be incredibly comprehensive and the most helpful.
Petrol changes all the time, especially when there’s unrest in the world, because it's affected by its availability and the ability to be transported. When political tensions arise, fuel checkpoints like the Strait of Hormuz are threatened, compromising transportation and directly hiking prices. Sanctions also bring down global access and availability.
Whether you buy an EV and sell your petrol vehicles or not depends on numerous factors, like infrastructure availability, driving patterns, or how much you’re willing to spend upfront. The upsides include significantly lower fuel & maintenance costs and better sustainability goals. But, the downsides include range anxiety & very high upfront, insurance, and maintenance costs.
The best strategy during volatility is to ensure that you have a fleet platform that has fuel management solutions. You can manage and oversee fuel transactions. Fuel probes ensure you carefully monitor fuel use (and identify waste). Driver monitoring means you can spot wasteful habits, like idling or aggressive driving. You can also take advantage of rebates and rewards.
The factors in your business that are impacted the most during a fuel price hike are operational and logistics costs; and naturally, your profits. Firstly, fuel tends to be one of the highest costs in transportation and logistics, making it a direct impact and leading to higher operational costs in general (more expensive deliveries and services, salaries, etc.). This cuts into your profits.
The best tips to train your staff on fuel savings include:
Teaching your drivers careful and responsible driving, like avoiding aggressive driving habits, sudden braking, and excessive idling.
Implementing driver monitoring tools and telling your drivers about them, so that transparency is established and they know that they need to practise responsible driving.
Introducing gamification so that drivers are encouraged and engaged in safe habits.
