The Car and Truck Fleet and Leasing Management Magazine

Fleet Execs Predict Fuel Prices to Remain High

January 28, 2008

LONDON – Results of the Fuel Management for Fleets 2008 report revealed that the vast majority of fleet executives expect fuel purchasing to become an even bigger challenge and environmental issues to play a much larger role in their fuel management decisions.

With skyrocketing fuel prices, supply chain issues, new hardware specifications, environmental regulations, and endlessly evolving technologies, the current climate can be daunting for fleet executives responsible for fuelling their vehicles. With this in mind, eyefortransport asked survey respondents to pinpoint the areas that concern them the most, and to reveal their strategies for dealing with these challenges.

The report revealed that traditional fuel purchasing strategies are still the most popular, with 26 percent of respondents relying on negotiations with suppliers, 17 percent negotiating with fuel-card companies, and 14 percent creating and implementing a fuel-buying plan. Appointing a fuel manager, setting up a limited network, implementing the latest price gathering technology, and using risk management (hedging) strategies are still low on the list of active strategies, but are on the rise, each seeing an increase of a few percent over the last year.

The majority of executives expect fuel prices to stay high or continue to rise — 12 percent said they would remain relatively stable and 80 percent expect oil prices to rise over the next twelve months. Only eight percent expect these prices to fall.

One of the more sensitive areas covered by the report is customer surcharging. While the hope is that, via hybrids, aggressive fuel efficiency programs, bulk fuel purchases, and alternative technology, fleets can limit surcharges in the future. Currently 18 percent of respondents in 2007, rising to 28 percent in 2008, divulged that they offset all fuel price increases with customer surcharges.

According to the 2008 survey, a combined 76 percent of fleet executives rated environmental concerns as being one of the most important factors in their fuel management decisions, of which 37 percent rate green issues as “very important,” and another 17 percent as “top priority.”

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Michael Sims is fleet operations manager for the Church of Jesus Christ of Latter-Day Saints.

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