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With the petrol price expected to increase between 48 and 52 cents again in South Africa in June many people are throwing their hands up.
Whether you are a fleet manager who is in charge of many vehicles or an ordinary person driving your car, the cost of fuel is central to our lives.
What causes fuel price increases and how to prepare for them
From businesses’ operational costs to individuals commuting to work, not to mention cost of living that is influenced by the price of fuel driving up food prices and interest rates, are all affected by fuel increase.
When fuel prices go up we can all expect to tighten our belts. But what causes fuel increases and how can we prepare ourselves for them?
What causes fuel price increases in South Africa?
The global price of crude oil is the factor that has the most impact on local fuel prices. Crude oil is used to produce petrol and diesel. So when the price of crude oil drops, as it did last year, this leads to the price of petrol falling.
From 2014 to 2015 the petrol price went from around R14 to R10 per litre. But with crude oil prices going up the Automobile Association predicts a rise in fuel prices from the current R12.83 per litre of 95 octane petrol.
Other factors that influence the price of fuel are the depreciation of the rand (because oil is traded internationally in dollars), fuel levies by government, wholesale margins of local oil companies, retail margins, and transport and delivery costs.
How much you can save your fleet by filling up before a fuel hike
It’s common to see vehicles queuing outside petrol stations the night before fuel prices are set to increase. But how much money will you save by doing this and is it really worth the inconvenience? If you have a car with a 50 litre engine it will currently cost R641,50 to fill up.
With a 50 cent increase it will cost you R666,50. So filling up before the increase will save you R25. For individual drivers this might not seem like too much of a saving. But if you are a fleet manager with a fleet of 30 vehicles you would save R750. And for a fleet of 100 vehicles you would save R2500.
This figure obviously increases when considering fleets of trucks since they have larger tanks. Since fuel is the biggest expense of most fleet managers, reducing the cost of fuel as much as possible is crucial.
How fuel management can save money for your fleet
With the rise in fuel prices it is more important than ever to save money for your fleet. Using fleet management services, you will be able to achieve measurable savings on your fuel spend on a monthly basis.
With the intelligent fuel management solution all the various sources of fuel data can be measured and presented to fleet managers regularly.
This includes fuel consumption calculations, and alerts regarding fuel usage of each vehicle in the fleet will draw attention to any suspicious activity and highlight possible fraud. This solution has saved clients millions of rands on their fuel bill.
Avis Fleet have a range of solutions as part of our fleet management services.
Find out more about Avis fuel management and other solutions here, or contact us directly to learn how to implement our Intelligent Fuel Management solution.
