Buying bulk fuel for your company can be great business decision. It can also be unnecessary and costly depending upon your business. Like all major choices you must make, the decision to buy bulk diesel fuel hinges on several factors. Understanding the benefits of bulk fuel buying and the costs involved are necessary before moving forward or staying where you are. The following are several factors you should consider before deciding if bulk fuel is right for your business.
Not every business needs bulk fuel. While there are great money-saving aspects to using bulk diesel fuel, it isn’t cost effective in some cases. Do you manage a large fleet that operates from a centralized location? If so, buying fuel in bulk can help you centralize fuel use. This applies especially to first responder units like law enforcement, fire stations, hospitals, etc. It is also a great option for utility fleets. In the case of first responders, having available fuel is important for the continuity of business operations, but even more importantly for saving lives.
Shipping companies using large trucks and delivery fleets can benefit from bulk fuel as well, but only if they have centralized fuel locations, like drop-points.
It is important to understand that fuel prices, even with bulk fuel, are not constant. The oil and gas industry hinges on an ever-changing, volatile market. There are so many major factors that can affect the price of oil – politics, disasters, economics, and more. A major event on the other side of the world can easily affect the global price of fuel.
If you are buying bulk diesel fuel, you must consider the fluctuations in the oil and gas market in your fuel purchase decisions. Watch the market, plan ahead, and use a company that understands these changes well. Some fuel delivery companies can help you offset the uncertainty of changing fuel prices to help you plan ahead.
Sometimes signing contracts in business can be daunting. The long term approach can scare away business owners from deals. However, when it comes to bulk diesel fuel, a long term contract can be very beneficial. When you sign a bulk fuel contract you can lock in a price for the duration of the contract. This has many benefits including saving you money if oil prices go up during your contract term and locking you in at a fixed price so you can budget better.
However, it is important to note that the opposite is also true – prices could also drop during your contract term, resulting in possible overspending. This is not a major issue though, as many fuel suppliers provide a competitive bulk diesel fuel price that is below market value to begin with. In the long run, bulk fuel contracts will serve both you and the bulk fuel supplier you’re working with.
Every company’s bulk fuel needs are different. Based on the number of vehicles for which you need fuel, the amount of fuel they are using, tanks you have on-site, and fuel usage consistency, your fuel needs will unique. Because fuel products only last so long before they must be replaced, you must understand exactly how much fuel you need so you don’t have too much on hand. It can be wasteful, both financially and environmentally.
You must also do your research to learn about current and long term oil prices, as well as the source of your supplier’s fuel. Understanding all of these factors can help you negotiate a bulk fuel price that is right for you and your company’s fuel needs.