November 2010, Business Fleet - Feature
Fuel Card Program Lowers Diesel Pump Prices
"There's an app for that." Ken Moore, a Fuelman executive, says the company is in the process of building a smartphone application that locates diesel stations in the driver's vicinity that accepts the Diesel Advantage Card.
There are some 170,000 retail fueling stations in the United States, though only about 30 percent of those sell diesel fuel. That scarcity reduces competition, giving merchants the opportunity to mark up the per-gallon price of diesel at their pump - even more than the margins for unleaded fuel.
"Fuel stations don't sell as much volume of diesel, so there is more of a markup," says Ken Moore, executive director, Fuelman national account sales. "It's more profitable for the station."
The good news is that the same convergence of forces that drives pump prices up gives Fuelman greater leeway to negotiate a better deal for its fleet clients. Fuelman negotiates with diesel merchants on a "cost-plus" basis, or wholesale cost plus a small margin to cover freight and transaction fees. The savings are passed on to the customer through the Fuelman Diesel Advantage FleetCard for Business.
Designed specifically for diesel fleets, the Diesel Advantage FleetCard offers savings of up to 10 cents per gallon. While diesel pump prices can vary dramatically from station to station, Diesel Advantage cardholders pay one price per gallon at all diesel fueling stations that accept the card. "The higher the diesel price, the bigger the discount," says Moore.
This pump price is the same for any size fleet, allowing small fleets to take advantage of this collective buying power as well. The program has no setup, transaction or annual fees.
Diesel Advantage also automates the tax exemption for off-road diesel purchases. It combines purchase details from retail and card-lock locations, as well as onsite tanks and mobile refueling.
The card is tailored for diesel fueling, but it also can be used for regular unleaded fuel purchases as well, with discounts of up to 5 cents per gallon. Other discounts include lower pricing on maintenance at selected merchant locations.
For fleets that need the widest selection of fueling points possible, Fuelman offers a cobranded MasterCard that is accepted universally; however, that doesn't include the wholesale diesel pricing.
Similar to other fuel card programs, the Diesel Advantage FleetCard can be customized to create spending limits by gallons, dollars, time of day, or day of week. Real-time alerts can be emailed for purchase exceptions and cards can be locked or unlocked instantly.
These parameters allow fleets to monitor fuel efficiency by vehicle, track spending by drivers and prevent unauthorized purchases before they happen, according to Moore.
Debbie Pantalion helps run the fleet at Sentinel Integrity Solutions, a provider of professional inspection services to refineries, chemical plants and wind energy suppliers. From its offices in Houston and Corpus Christi, Texas, Sentinel has 16 Fuelman Advantage cards for its Ford F-150 pickup drivers.
Pantalion says she used to process a lot of paper receipts, which were turned in with drivers' timesheets. They were approved, but not reviewed very closely.
"Before we had the fuel card, so much of it was after the fact," she says. "It could have been a week or two before we realized there was a problem. There was no control over it."
Since she implemented the fuel-card system, Pantalion is notified instantly when a driver tries to exceed a fuel limit. She can instantly create a report that has information on where and when the fuel was purchased, what type and how much.
"The controls in place have definitely worked to our advantage," she says.