Fuel card management: the gap between policy and practice

Fuel card management: the gap between policy and practice

Fuel cards are the standard mechanism for controlling fleet fuel spend. They are also a consistently documented source of fuel cost leakage when not actively managed.

The Automotive Fleet magazine’s annual fleet benchmarking survey found that organisations with formal fuel card management policies spent an average of 7.4% less on fuel per kilometre than equivalent organisations with fuel cards but no formal management policy.

The documented sources of fuel card cost leakage

• Transactions without odometer verification. Without odometer recording at the point of fuelling, it is not possible to calculate fuel consumption per kilometre — making variance detection impossible. The American Transportation Research Institute documents that odometer-less fuel card programmes show significantly higher fuel cost per kilometre than programmes with mandatory odometer recording.
• Out-of-network transactions. Fuel cards issued by major distributors typically carry volume discount pricing at network stations. Out-of-network transactions lose the volume discount, typically adding 5–12% to per-litre cost. In the absence of a policy restricting purchases to network stations, out-of-network transactions account for 8–23% of total fuel card volume in unmanaged programmes.
• Card sharing. The Australian Fleet Management Association’s fraud research documents that card sharing or misuse occurs on an estimated 4–8% of unmonitored commercial fuel card programmes.
• Exception reporting not reviewed. Research by the National Association of Fleet Administrators found that exception reports were reviewed within 48 hours in only 31% of organisations surveyed. In 42% of organisations, exception reports were never reviewed at all.

The cost of reviewing exception reports: 30 minutes per week. The cost of not reviewing them: documented at 3–8% of annual fuel card spend.

Sources

Automotive Fleet magazine benchmarking survey; ATRI odometer recording research; Australian Fleet Management Association fraud research; National Association of Fleet Administrators exception reporting study.