Page 49 - Webinar workbook

Chapter 3

Fuel Pricing

HOW ARE FUEL PRICES DETERMINED?

The price of crude oil is determined by global supply and demand. In recent years, worldwide
demand for crude oil has increased, and at times caused global oil prices to rise.

Crude oil is the single-largest factor in determining the price of gasoline at the pump in the
United States. According to the U.S. Energy Information Administration the price of crude oil

makes up approximately 70 percent of the price of a gallon of gasoline.

Combined federal and state taxes account for about 14 percent of the average price of gasoline,
marketing and distribution costs account for 10 percent, and the remaining 5 percent covers
the costs of refining.

Fuel Cards

A good fuel card program offers carriers significant per-gallon discounts on diesel, as well as
savings on other services.

Fuel cards are basically partnerships that are designed to drive sales for fuel station merchants.

When a fuel card provider sends its members to partnering truck stops or fuel stops, it receives
a cut, usually 2% to 3%, of the fuel sales. To drive more of the fuel card’s members to their fuel
stops, the merchants offer exclusive discounts off the per-gallon price. These discounts may be
different at each fuel stop location and can change daily, based on fuel prices and settlement
rates between the merchant and the fuel card company.

As a carrier, you want a fuel card that consistently offers strong savings on diesel at locations
along the lanes your company runs. Finding a card program that offers the right blend of
discounts and flexibility can help your fleet save thousands of dollars a year on fuel.

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