The Business of Trucking
How to get the best fuel price everytime
I’ve been explaining fuel tax and how it works, and I have said several times that you need to know the real cost of the fuel after the tax is deducted from the pump price. This month, we will discuss how you can figure that out. I’ll also talk about a great tool for getting the very best fuel price every time, so read on.
How do I know what the actual fuel price is?
First you need to get the fuel tax rate sheet I talked about earlier. If you don’t have access to the Internet, call my office and I’ll get you one. Keep in mind this rate can change every quarter, so make sure your rate sheet is up to date. Then you take the pump price in a given state and look up that state’s fuel tax rate and subtract the fuel tax from the pump price and that will give you the actual fuel price.
Could you give me another simple example of this?
Let’s use Missouri again. Say today’s average pump price there is $2.78 a gallon, and we are also going to be in Oklahoma today. We see that Oklahoma’s fuel price is $2.76 a gallon, and every penny counts, so we’d better fuel up in Oklahoma, right? Wrong answer, cowboy. Remember to look at your sheet and subtract the fuel tax before comparing prices. Missouri has a 17-cent-per-gallon tax and Oklahoma has a 13-cent-per-gallon tax, so after tax the fuel in Missouri is $2.61 a gallon compared to $2.63 a gallon in Oklahoma. Understanding this concept will save you thousands of dollars in fuel cost and usually result in fuel tax refunds every quarter.
This sounds like a lot of work. Is it worth it? Is there an easier way?
It sounds like a lot of work, but once you do this a few times it becomes easier, and it is well worth the effort for all of the money you will save. And yes, there is an easier and more accurate system than using the fuel tax rate sheet. What you need is what’s called fuel optimization software. Large carriers have been using this technology for several years, but it was generally too expensive for owner-operators. That has recently changed.
This is how it works: You put in your starting and ending points for your trip. The software routes your trip and then checks up-to-the-minute fuel prices at every fuel stop along your route and calculates the actual fuel price after fuel tax in that state. It then tells you exactly where to buy your fuel on each trip.
You can have this system for only $25 a month. For a free trial, call my office at (888) 262-8585 and we’ll get you started.