As tough as life was last year when the pandemic started, there was one bright spot for business owners, low fuel prices. Fuel prices were lower than they had been in years. Unfortunately, that’s not the case this year. Prices are higher than ever and rising, and supply issues are increasing as the world recovers from the economic effects of COVID-19.
As a result, demand is at a record high. This past July 4th, the Energy Information Association (EIA) released data that showed gasoline demand was higher than ever before. According to the EIA, demand for gasoline is 10% higher than in 2020, during the start of the pandemic. Business owners who pay for large sums of fuel may look at the rising prices and wish for the early days of the pandemic when fuel was cheaper.
Here in our home state of California, fuel is more expensive than ever. California has the highest state tax in the country at 81.45c/gal. The state tax has been increasing two cents a year since 2017 and is scheduled to rise again in 2022. This tax increase, on top of record-high fuel prices, will surely affect your budget and profit margin.
Some businesses can reduce their fuel costs by buying wholesale fuel. Fuel wholesale price or the rack price includes the crude oil cost, distribution cost, refinery cost and profit, and storage fees and taxes set up by the state and federal government. The retail price of fuel includes all of those costs, including local and state sales taxes as well as federal taxes.
As a California fuel and lubricant supplier, we’re used to the high prices in the state. Many of our customers are local business owners who rely on us to help them reduce their fuel costs. One of the ways we do this is through our fleet fueling program. Let us tell you a little about this program.
Our fleet fueling program is part of the Commercial Fueling Network (CFN). The CFN is comprised of a network of stations that offer discounts on fuel. As part of Greg’s Petroleum Service Fleet Fueling program, you get access to the FleetWide Network, a network of 57,000 fueling locations nationwide. Here’s how the pricing works for this program:
The program is divided into In-Network and Extended Network pricing. In-network pricing is defined as a CFN site. There will be signage indicating that CFN is accepted there. Extended network sites will have a Fuelman logo on the pump. Each type of site offers different price structures based on the station type and wholesale pricing. The lowest prices are found at Greg’s Petroleum Service branded locations for program members, followed by In-Network sites, and then Extended network sites.
A huge advantage of the Fleet Fueling program is the lower prices. Retail fueling locations take longer to lower their prices when fuel prices fall. Commercial fueling site prices align closer with wholesale fuel prices. Smart business owners can take advantage of these price adjustments by ensuring that their fleet vehicles are filled up at Greg’s Petroleum Service Branded locations or in-network sites. We’ve found that customers who consistently fill up at these types of stations for at least 75% of their fuel needs see substantial savings.
Lower fuel prices aren’t the only way you can save money on the Greg’s Petroleum Service Fleet Fueling program. This program also offers you substantially more control and data on your fuel use. Using our program, you can track where your vehicles are loading, how much they are loading, what type of fuel they are loading, and who filled the vehicle. In addition, you can eliminate wasteful spending on concession items in stores and track your miles per gallon. Using our program, you’ll get access to detailed reports outlining all of this data so you can accurately assess all your fuel costs.
You don’t have to collect and sort receipts, monitor company credit cards, or track expenses. Our program offers you peace of mind by setting fuel limits and limiting unauthorized purchases. Our statements can be customized to your needs and accessed through our online portal. If you ever have questions or concerns, we’re always here to help.
2020 was a volatile year for fuel prices. No one could have predicted the roller coaster of price adjustments as the COVID-19 pandemic raged. Now that the economy is opening back up and cases are dropping, fuel prices are projected to remain higher than ever throughout the summer months. Gas prices are heavily influenced by crude oil prices, with the price of crude oil making up to 70-80% of the total gas price. Analysts at Goldman Sachs predict that crude oil Brent prices will be at $80 per gallon by the end of summer, which is a 10% increase. The average fuel customer could see a jump in fuel prices of 20 cents or more if that happens. No forecast is certain, especially after the past year, but it’s best to start preparing now for higher fuel prices this summer.
Summer is typically a busy work season for many of our fuel customers. If you’re considering signing up for our fleet fueling program to offset the rising fuel costs, now is the time. You’ll be amazed at how much your business will save with the lower prices and how much easier it will be to plan your fuel budget. Call us today and get your business signed up before prices rise even higher!