The rising fuel prices in Kenya have posed a significant challenge for businesses that rely on fleet operations.
For fleet owners, the surge in fuel costs has triggered a series of challenges that demand strategic solutions.
In this blog post, we will look into the critical challenges posed by rising fuel prices and explore effective strategies to minimize costs and survive the hard economic landscape.
The Fuel Price Surge: A Hard Reality
Over the past year, fuel prices in Kenya have seen a staggering increase with the price of petrol reaching KES 194.68, diesel at KES 179.67, and kerosine retailing at KES 169.48. This unprecedented surge has left businesses grappling with a range of multifaceted challenges that require immediate attention and proactive planning.
- 1. Escalating Operational Costs
With fuel expenses accounting for a substantial portion of fleet operational budgets (about 60%), the spike in fuel prices has a direct impact on the bottom line.
Reports indicate that businesses witness an average increase of an average of 20% in operational costs due to rising fuel expenses alone. According to Kenya Transporters Association, an increase of about KES 9 in fuel prices most certainly leads to an increase of between 20 to 22% in operational expenses.
This not only squeezes profit margins but also necessitates a careful reevaluation of operational strategies.
- 2. Revenue Redirections
The ballooning fuel costs have forced fleet owners to make tough decisions. Businesses are reportedly redirecting revenue streams to cover fuel expenses, diverting funds that could have otherwise been allocated to growth initiatives or maintenance.
This shift has the potential to interfere with expansion plans and hinder overall business development.
- 3. Squeezing Transport Budgets
For businesses that rely heavily on transportation, the impact is particularly high. Businesses and companies such as logistics firms have had to revise their transport budgets, often leading to difficult choices such as reducing service coverage, altering delivery schedules, or even temporarily suspending certain operations.
Strategies for Navigating the Fuel Price Challenge
Amidst these challenges, proactive fleet owners are adopting innovative strategies to maintain their competitive edge and mitigate the impact of rising fuel prices. Top ways to keep your operations going:
- 1. Fuel Monitoring and Telematics Solutions
Adopting advanced telematics solutions allows fleet managers to gain real-time insights into fuel consumption and driver behavior.
Using GPS monitoring solutions, fuel sensors, optimizing routes, and minimizing idling, businesses can potentially achieve 20% savings on fuel costs.
- 2. Driver Training and Behavior Modification
Investing in comprehensive driver training programs can yield significant benefits. Businesses that have integrated driver behavior modification initiatives have observed improvements in fuel efficiency.
Did you know that increasing your highway cruising speed from 90km/h to 120km/h can raise fuel consumption by as much as 20%?Encouraging economical driving practices can translate into substantial fuel savings over time. You should always insist that your drivers should never overspeed or keep the vehicle idling as this uses more fuel.
- 3. Fleet Maintenance
A well-maintained fleet is an efficient fleet. Proper vehicle maintenance, including regular servicing and tuning, can enhance fuel efficiency.
Fleet owners are discovering that preventative measures can be a great tool in mitigating fuel-related challenges.
- Regular maintenance and tuning up your engine can improve your vehicle’s fuel economy by up to 4 percent.
- Keeping your tires inflated can improve your gas mileage by up to 3.3 percent
- Regular oil changes and using the right motor oil also increase gas mileage by 1 to 2 percent.
{Gas mileage = the distance that a vehicle can travel using a particular amount of fuel.}
Conclusion: Navigating the Road Ahead
The rising fuel prices present formidable challenges for fleet owners in Kenya. However, armed with strategic insights and proactive measures, businesses can overcome these challenges to become more efficient and achieve sustainable growth.
By adopting fuel monitoring solutions, optimizing driver behavior, and prioritizing fleet maintenance, fleet owners can not only weather the storm of rising fuel prices but also steer their businesses toward a more prosperous future.
As the journey continues, a steadfast commitment to innovation and adaptability will be the driving force behind overcoming these obstacles and thriving in an evolving economic climate.
About Tracking Hub Limited
Tracking Hub Limited is an Auto Telematics | Fleet Management | Fuel Monitoring | | Vehicle & Bike Tracking company providing solutions to fleet owners and fleet managers across Kenya.
We help you track fuel usage for all your assets. Whether it is the refueling patterns or monitoring the fuel tank, our solution keeps you informed on how each unit is using fuel.
