Fuel card services can save your fleet a great deal of money with alternative prices and discounts, but how exactly are these savings calculated? There are two main factors that determine your negotiated price with a fuel card service: the amount of fuel your company uses and your fleet’s ability to use the same station or truck stops.
However, from your bottom-line perspective, it’s important for you and your fleet to have a good grasp on what the prices at the pump truly mean. Understanding the calculation behind the following prices can help your fleet save greatly on fuel.
Credit Price is what drivers see on the marquis outside a gas station when they’re driving down the road. It is the amount that a credit card user will pay. This is normally the most expensive price a driver is going to be offered from a gas station. This amount is inflated to help offset the merchant fee Visa and MasterCard charge to companies using their services.
Cash Price is as simple as it sounds. It is the discounted cost you get if you pay with cash, and it’s determined based on marketplace competition. Typically, it’s six cents/gallon cheaper than the credit price. With a fuel card, you will at least get this reduced fee in almost all circumstances.
The Retail Minus Price is where the greater savings begin, especially if you have a fuel card. This is identical to the Cash Price minus a negotiated discount. The more fuel you purchase, the larger discount you receive.
The amount it costs to physically receive a gallon, pay taxes on it, and have it delivered to the station is called the Cost Price. For example, Cost Plus 10 is the cost of a gallon of fuel, plus ten cents per gallon as a pumping fee.
This price is not attainable due to the station needing to make a profit for its services. However, cost plus price is the next best “bang for your buck”. It takes the original cost to the station and simply adds on a small pumping fee of around ten cents. This is almost always the best discount when fuel margins are high.
Many fuel cards have a Better Of Price option. This option ensures that you are getting the best discount available. Better of Price weighs the different pricing options, finds which is the cheapest, and then uses that price for your fill up.
If margins are low and the Retail Minus Prices end up being $3.33 per gallon, while Cost Plus Price is $3.35, you will get the Retail Minus Amount. This option is normally only available to larger fleets, but it can save a significant amount of money.
A fuel card offers fleet managers several ways to improve fuel efficiency and save on expenses. The Fuelz card provides per-gallon discounts and rebates at the pump, online reports for fuel economy, and customer support that makes it easier to manage your fleet. Contact us today at 855-GO FUELZ to find out more about what we can do for your business.