This piece originally appeared at Vinity Soft, a leading software maker for fleet vehicle managers.
A recent government outlook projects diesel fuel prices to increase by 15% in the next year. That’s not exactly pocket change that you can just pull out of your business. Fleet vehicle managers will have to figure out how to account for that additional cost without having it negatively affect their bottom lines. We have some tips that can help.
While fuel cost projections can be as unstable and unreliable as any other government forecast, there are still productive ways to account for fluctuations in your fleet vehicle business.
One of the easiest ways to account for potential expense increases is by adding projection values into your current budget. Consider this example: if the cost of diesel fuel does indeed rise by 15% next year, and one of your vehicles uses $100 in fuel per day, then it will cost $115 instead. Over the course of a single week that’s an additional $105 that just one vehicle will use. It’s easy to see, then, how quickly that 15% will add up.
It’s not necessarily a reason to worry though; at least not just yet. This is particularly true if you use a capable fleet vehicle management software suite that can provide you with a history of data on your business. The age of your business will correlate to just how much data you can dig into.
First and foremost, it will show changes in fuel cost over time. You’ll also be able to examine the percentage of your budget that you committed to fuel costs during that time.
While knowing what fuel has cost over the history of your fleet vehicle business is useful information to have, it’s not the only information you can use to prepare for projected increased expenses. You can also explore instances when you came in under budget. These could be anything ranging from repairs to parts to vehicle servicing.
Those savings could provide breathing room when the price of fuel rises. In addition, increased cost projections also let you look outside your business’s current data to allow for some innovative solutions. Finding additional services or options to offer your customers could help offset unexpected costs on your end.
At the end of the day, fuel cost projections are just that — projections. But that doesn’t mean that they aren’t useful or should be ignored. No market makes fleet vehicle management decisions easy and this is especially true of fuel. Projections offer a chance to stay ahead in your business by knowing what might be coming around the corner. While it can certainly be a challenge, the right fleet vehicle management software makes it a challenge that is very approachable.