Maximise fuel economy and encourage efficient driving

The first step towards improved fuel efficiency is building a better understanding of the current situation. Telematics and various software products can make the process easier, but it’s possible to achieve results through odometer (mileage) readings and fuel card data, especially for small- or medium-sized fleets.

Collecting fuel data

You need to put a process in place to capture the miles driven and fuel use, ideally for every individual or vehicle.

Every time a vehicle is refuelled, you should collect the following data:

• refuelling date
• vehicle identifier, such as the vehicle registration number
• driver name
• litres of fuel drawn
• mileage since last refill (record the current odometer (mileage) reading and subtract previous data)

You should record mileage when any vehicle refuels, regardless of whether it has a tracker. You can ask employees to do this as part of their objectives.

Use the MPG monitoring template spreadsheet as a starting point for recording and processing this data.

See our advice on managing mileage for further information on capturing mileage data and Mileage management: a guide for fleet managers

To be able to make comparisons, it’s useful to know both total fuel usage and miles per gallon (MPG). It’s also best practice to create a list of the manufacturer’s MPG for every vehicle and measure drivers against this benchmark. This will also help to create more accurate future whole-life cost projections.

Fuel cards for company car drivers

Best practice is to provide all company car and van drivers with fuel cards, as this makes data collection easier. Private fuel costs should be recovered; see our best practice guide on Fuel cards: a guide for fleet managers for more information.

If drivers use fuel cards when refuelling, all of the required data will be available from the fuel card supplier, provided that:

• employees provide accurate mileage information to cashiers when refuelling
• accurate vehicle information is recorded, ie fuel cards are used for the correct vehicle and the cashier inputs the correct values

Company car and van drivers should declare their business and private mileage every month. The employer then deducts the cost of the private mileage from the employee’s salary, based on a cost per mile calculated from their actual fuel consumption (MPG) and the cost of fuel purchased. To encourage employees to declare their private mileage, you could assume that all costs are for private mileage if the employee does not make a declaration.

The benefits of this system are:

• both the driver and the employer benefit from choosing fuel-efficient cars
• it rewards fuel-efficient driving, benefiting both the company and driver
• it encourages the employee to buy low cost fuel, eg from supermarkets (subject to fuel card permissions)
• VAT savings are based on the actual fuel used for business purposes, which will usually result in additional savings
• it’s still possible to make savings if free private fuel is provided, although we recommend moving away from this policy generally, due to its cost to both sides

If a fleet decides not to implement this system, it should adopt HMRC advisory fuel rates (AFRs).

Once you are capturing accurate data on fuel use and mileage, miles per gallon (MPG) can be tracked across the fleet and over time. You can then report this back to drivers, encouraging awareness and improvements in driving style. Poor MPGs can be due to the route travelled, driver behaviour or an issue with the vehicle. Very occasionally, it can be an indicator of fuel theft.

MPGs

To build a comprehensive understanding of the fleet, we suggest monitoring the following for every vehicle:

• monthly and quarterly MPG
• MPG as a percentage of the manufacturer’s combined figure for the vehicle
• average pence per mile (monthly, quarterly and year to date)
• MPG against the overall fleet MPG average for that category of driver
• exceptions or ‘outliers’ where the driver’s MPG is a certain percentage below the manufacturer’s MPG

You should calculate MPGs monthly, but it is also useful to monitor across a longer period, such as quarterly, to ensure you take into account any end of month purchases, which can distort calculations significantly.

Use the MPG monitoring template spreadsheet as a starting point for monitoring MPGs (the spreadsheet is most suitable for small fleets).

You should list vehicles or drivers by their performance, so it’s possible to identify exceptional MPGs by vehicle make, model or driver.

Where the same models are used across a fleet, it can be useful to compare vehicles within and across departments, to identify poorly performing vehicles.

Human error, by both drivers and fuel station cashiers, when recording mileage is likely to lead to some occasional MPG inaccuracies. However, where fuel consumption is monitored over the longer term, errors will be rectified as subsequent readings are submitted.

Ecodriving is a driving style that reduces fuel bills, cuts carbon emissions and lowers accident rates.

Subsidised ecodriving training provided by authorised training companies in England is open to all business or organisations with car and van drivers. Given the savings on fuel, investing in ecodriving training is very often worthwhile and can be part of a wider package, for example on road safety. The training is based on extensive research into the technical and behavioural aspects of reducing fuel consumption.

For an overview of techniques, see our guide on advising fuel efficient driving techniques for your fleet.

Ecodriving techniques

The core techniques are:

1. drive smoothly – anticipate situations and other road users as far ahead as possible to avoid unnecessary braking and acceleration. Maintain a greater distance from the vehicle in front, so that you can regulate your speed when necessary without using the brakes
2. step off the accelerator – when slowing down or driving downhill, remain in gear but take your foot off the accelerator as early as possible. In most situations and for most vehicles, this will activate the fuel cut-off switch, reducing fuel flow to virtually zero
3. shift up early – when accelerating, shift to higher gear early, usually by around 2,000-2,500 revs per minute (RPM). Skip gears when appropriate
4. avoid excessive speed – high speeds greatly increase fuel consumption

To see improvements and encourage long-term adoption of fuel efficient driving, fleet managers should follow-up on monitoring and / or ecodriving training by engaging with staff in a number of ways.

Identify drivers who need support

Vehicles or drivers should be ranked by their performance, so you can identify exceptional fuel consumption (MPG) (eg 20% below the manufacturer’s estimate or against the fleet average) by vehicle make, model or driver.

For drivers in the bottom quartile, you should ask questions to identify any reasons for the poor performance and discuss actions. Poor MPGs might be due to mechanical problems or different duty cycles, such as more frequent stopping and starting or heavier loads.

Help, advice, information and appealing to a driver’s pride in his or her work are often more effective than disciplinary action. Suggestions could include carrying out any necessary vehicle repairs, reviewing equipment required to be carried, potentially removing excess weight in a vehicle, and avoiding excessive speeds.

Accurate and continual monitoring of fuel use allows you to identify drivers who will benefit most from attending an ecodriving training session, and track their improvement after training.

Set targets

Individual, team or department targets can be set relative to the manufacturer’s MPG (eg 15% below the manufacturer’s MPG) or against historic performance, or by pence per mile. See below for more information on setting up a communication programme. You can share information with managers or directly with drivers.

Produce a driver league table and reminders

Producing a monthly or quarterly league table of drivers’ MPGs can reward and encourage fuel-efficient driving through healthy competition. A league table, plus periodic reminders about the principles, or top tips, are effective ways to embed the principles of ecodriving training

Offer incentives

Incentive schemes, which identify and reward the most efficient drivers, can be an inexpensive way to promote fuel efficient driving.

Individual or team bonuses, vouchers, donations to a chosen charity or team social fund can also motivate improvements and may be funded through savings on fuel costs.

For more information and case studies, see Advising fuel efficient driving techniques for your fleet.

Communicating with staff

It’s helpful to think about how fuel economy information is shared with staff to maximise engagement.

As a starting point, it’s helpful to share information on fuel costs, including the total spend on fuel by the business, by department, and individually. Key indicators to report on are MPG, pence per mile for each vehicle, and averages across groups of vehicles or teams. Information on the variation in MPG or pence per mile across the business might also prompt discussion and engagement.

If targets are being introduced, drivers should be aware how targets have been set and given advice (ie driving tips) on how they can meet the targets or be offered training.

Information can be shared via:

• intranet, email and text
• team / management / departmental briefings
• scheme policy documents

Repaying private fuel use based on actual costs

If company car drivers with fuel cards pay the cost of their private mileage as the appropriate proportion of their actual fuel costs, they will have a personal financial incentive to drive efficiently for all their mileage, business and private.

In contrast, the more common system in which private mileage is repaid as a fixed ‘pence per mile’ using advisory fuel rates (AFR) provides no such incentive.

Removing free private fuel benefit

A driver is deemed to be in receipt of private fuel benefit if they fail to fully repay their employer for the cost of fuel they use outside of work. We do not recommend providing free private fuel due to the financial and environmental implications. Many employees and employers are worse off with the ‘benefit’, and it demotivates efficient driving and the purchase of lower cost fuel.

Drivers can be provided with a fuel card without the automatic and associated provision of private fuel benefit. In fact, it is relatively easy to recover private fuel costs through a reputable mileage management system, in conjunction with a fuel card. Additionally, fuel (and other corporate purchasing) card invoices allow the company to recover VAT on the business mileage element of fuel spend, removing the need for drivers to supply fuel station receipts, when submitting claims.

See our Quick guide to private fuel benefit covering methodologies for recovering private mileage cost and worked examples demonstrating how offering free private fuel can be worse financially for both employees and employers. The only drivers likely to benefit are those undertaking very high private mileages.

More information can also be found in Company cars: a guide for drivers and employers. 

For an overview, see our best practice guide on How fleets can use technology to manage driver behaviour and vehicle efficiency.

Telematics can provide accurate mileage management and fuel economy reports on specific vehicles. Additionally, you can use telematics data to refine the analysis and understanding of MPG results. For example, it’s useful to review the levels of vehicle idle time and produce an ‘exceptions’ report. Specifically, looking at total idle time in any one day (for example anything in excess of one hour a day) and a frequency report on individual incidents over a defined limit (for example idling for more than 15 / 20 minutes) would be good starting points.

In-car technologies can give drivers instant feedback on their driving behaviour. Driver training and in-car technologies naturally complement each other. Training provides drivers with a good understanding of fuel-efficient driving techniques, while the technologies provide ongoing reminders and feedback encouraging drivers to use and further develop their fuel-efficient driving skills.