Once upon a time, diesel prices were dependably lower than gasoline prices, but this hasn’t been the case in nearly 20 years. With diesel prices showing more volatility than ever before, EquipmentWatch has released a simple guide to help fleet managers cope with high fuel prices.
Here are some tips from the EquipmentWatch “Fuel Cost Volatility Survival Guide” to “help your equipment sip—not guzzle—diesel.”
10 Fuel-Saving Tips to Survive High Prices
- Slow down to increase fuel economy.
- Use cruise control to optimize fuel efficiency.
- Operate in the highest possible gear to reduce rpm and fuel consumption.
- Stop idling to conserve fuel.
- Plan your route to avoid traffic and delays.
- Maintain proper tire pressure to maximize miles per gallon.
- Perform preventive maintenance on oil and air filters to preserve fuel efficiency.
- Right-size your equipment for the job at hand to prevent fuel waste.
- Upgrade equipment to newer and more-fuel-efficient models.
- Use bio-diesel fuels to reduce greenhouse emissions.
Managing your business during high fuel prices
Forty-two percent of machine operating costs are attributed to the consumption of fuel, according to analytical research offered in the guide.
The “Fuel Cost Volatility Guide” says volatile diesel costs can have an especially negative impact on contractors with large projects resulting from bids that were approved months or years ago. Often, there is little recourse for business owners in these instances, which makes conservation of fuel even more important when dealing with narrow profit margins.
The guide says that “contractors who attempt to negotiate a fuel surcharge or rate increase should arm themselves with credible third-party data” to justify the charges.
Understand how fuel prices impact your bottom line
EquipmentWatch offers a calculator for contractors to determine their organization’s internal charge rate, which can help them understand what fuel price increases will do to their profit margin for a project.
Calculating your business’ break-even point can also answer critical questions about your organization, including if fixed costs are in line with its volume and revenue structure.
The guide also recommends that business owners appoint someone to oversee fuel for an equipment fleet so that the bottom line can be watched closely.
As for why fuel prices have been so volatile, a combination of market factors is blamed. According to the guide, diesel prices have increased over 74% from last year’s rates.
“If you’re smart about how you manage your equipment, experts say you can still make money in this volatile market,” the guide states.
The “Fuel Cost Volatility Guide” is available for full download on the EquipmentWatch website. The report is accompanied by a four-part series about how to manage rising fuel costs.
