Fuel Purchasing

Fuel Purchasing

Purchasing Sources

The source a fleet manager purchases fuel from will be influenced by a number of factors. Sources will range from bulk purchasing through to purchasing from a regular gas station, or a mixture of the two.

Complexity

Fuel purchasing can be a complex business, and the deals that are on offer reflect this complexity. For example, a deal may involve purchases of a guaranteed minimum quantity from a refinery, with a limited allowance to top-up at certain retail outlets at a heavily discounted rate.

Monitoring Performance

Fuel quality is generally graded, and this is enshrined into the laws of most countries. Commercial aviation fuel quality is covered by global agreements. It remains important, however, that vehicle performances and fuel consumption is strictly monitored by fleet operators so that they may compare one fuel performance with another. The feedback from this monitoring will be used to aid in the purchasing process, to ensure that the fuel is the optimum quality.

Price Volatility

One of the main factors to consider when purchasing fuel is the volatility of the fuel price. This volatility is due to variations between supply and demand. Although demand peaks and troughs tend to be reasonably smooth, supply peaks and troughs tend to be more dramatic, as oil producers vary their output.

Many fuel purchasers attempt to time their purchases so that they buy at the lowest price possible and keep strategic stocks when they believe prices are likely to rise. Some fleet operators will employ specialist fuel purchasers and practice price hedging in order to lessen the effects of fluctuations.

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