The city of Pahokee Florida is getting serious about FUEL PURCHASING POLICIES after an inspector general report highlighted a large number unauthorized purchases by city employees using fuel and credit cards. The Mayor of Pahokee, J.P. Sasser, said he believes city employees are stealing gas and putting it on the taxpayer's tab. "Do I think there was fuel theft going on? Hell yes," Sasser said.
The inspector general report shows that from October 2010 to March 2012 the city paid for 33,440 gallons of both unleaded and diesel fuel for a total cost of close to $111,000. The report later states that 21 percent of those transactions were questionable due to fuel cards being used on more vehicles than it was assigned to, receiving more fuel than the tank can hold, and frequent incorrect odometer readings.
According to Sasser, the issue goes beyond waste. "You would hear about guys filling up city equipment then filling up their girlfriend's equipment and their wife's car, their buddies car," Sasser said. "That's been going on for years and years." As we at PowerUp Fleet have long asserted, slippage is easily over 15% when fuel is not being properly managed. Over and over again, these types of stories prove it. But as a sales rep you have to convert the loss into cents per gallon. In this case, they purchased around 2000 gallons a month, and with a potential slippage rate of 20%, around 400 gallons per month were being wasted. At $3.32 a gallon, they were driving their total fuel cost up by $1,328 per month or $.83 per gallon.
The inspector general's leading recommendation is to implement written policies that are to be signed by each employee and backed up with adequate training. Hello? This is what every business should have implemented from the very first day they issue a fleet card to their employees. How many of your customers today DON'T have a policy in place? How often are you leading with the "Policy Discussion" when approaching new prospects?
As a salesperson, it's just a matter of how strongly you believe in the importance of controls and whether or not you are going to focus on the "Policy Discussion" or allow the prospect or customer to lure you into the commodity trapping price discussion.
The report goes on to discuss implementing tighter controls. The inspector general has recommended a 2-card system because of the superior controls available. They have also recommended implementing odometer reasonableness checks at the fuel island and aborting the transactions if the calculated MPG doesn't meet the expected range of the vehicle.
I guess they have rightfully decided that advanced controls are needed. Every time I hear a fuel card marketer say "Our customers really don't want the controls", I cringe because I know there's a time bomb ticking. When it blows up, the customer is going to deny ever saying that they didn't want controls and point the finger at you for not implementing them. I've seen it a hundred times as I work with clients. As of late, I've also seen courts side with the customer and make the marketer pay for the loss. So you're protecting yourself by forcing the customer to implement at least some form of control.
If you would like to learn more about PowerUp Fleet please feel free to contact us. We provide the very best Sales Force Automation/CRM solutions for the petroleum industry. Our systems are customized specifically to your business needs, increasing productivity and allowing advanced marketing techniques not possible with other non-specific applications. We also provide creative and effective sales training services for your commercial fleet fueling sales team.