With the volume of fleet fuel that we manage for companies, sometimes that animal can be ferocious and unruly. I feel like a lion tamer, whip in one hand, pistol on my hip, and a chair to calm the unruly beast, the ever-changing fuel market. Some days we get a breather and the fuel market and vendors are as calm as a kitten. I don't want to make fuel management sound like it should be a highly stressful portion of your day, but it does need your attention to some degree on a daily basis. With the fuel markets as volatile as they are, some days require more time, energy and expertise than others.
In many companies, the fleet manager handles fuel management, while many large companies have a fuel manager and some a fuel management department. Smaller companies can do just fine delegating fuel management duties to their fleet manager if he or she has some level of knowledge and expertise of the fuel markets. They should be familiar with fair and equitable pricing for delivered fuel and have the ability to negotiate pricing discounts for over-the-road fuel. These individuals should also have the resources and capability to track, monitor and audit all of the transactions for compliance. This is in addition to all of the other duties that require their constant attention. Unfortunately, in the real world, you can seldom find such as person.
Even in large companies that consume large volumes of fuel, you would be hard pressed to find a person that can handle all of those duties with any degree of proficiency. In addition, the fleet or fuel manager has to be a tax expert or spend the time to do the research to ensure that fuel suppliers are collecting the proper taxes. Believe me, in the fuel management business we see enough instances where they are not.
The taxes can boggle one's mind. Take Ohio for example. If you are using dyed diesel in that state, there are five different sales tax rates depending on where the fuel was purchased. New York can drive a fuel manager insane trying to determine the correct fuel taxes for on-highway fuel. The local tax portion can be in a percentage or in cents per gallon, and rates depend on the county, the city or the town. As you can see, the process can be extremely difficult and unwieldy for even the most expert fuel or fleet manager, particularly for those managing a large decentralized operation.
For those of you who do your own fuel management, if you are not an expert in all fields described above, you must either become one, hire one or outsource this important aspect of your business to a fuel management firm. Your bottom line will certainly become healthier, albeit a little fatter. But then again, that is a good thing.
Glen Sokolis is president of Sokolis Group, a nationwide fuel management and fuel consulting company, www.FuelManagementSokolisGroup.com. You can reach him at [email protected] or (267) 482-6160.
Previous installments of "Friday Fuel:"
* "Successful Fuel Management Program Equals Discipline", 9-11-09
* "Who's Watching Your Fuel Program," 9-18-09
* "Fleet Fuel Margins: Are You Paying Too Much?" 9-25-09
* "How Do You Audit Your Fleet Fuel Invoices?" 10-2-09
* "Fleet Fuel Price Negotiating: Details, Details", 10-9-09
* "Mobile On-Site Fueling", 10-16-09