Your second largest cost is being recorded in a notebook

In a transport business almost every cost is fixed. The one that moves daily has the weakest paperwork behind it.

Driver salaries are contracted. Vehicle EMIs are scheduled. Insurance is annual. Maintenance is planned. Fuel is the only major cost that changes every single day, and it is the one still tracked by hand.

The share nobody disputes

The PPAC study conducted by CRISIL across 2020 and 2021 found trucks alone accounting for 64.2 per cent of India's retail diesel sales, with buses adding a further 4.1 per cent. 

An example of the impact it has  operator's books is set out plainly in the Comptroller and Auditor General's 2024 performance audit of the Bengaluru Metropolitan Transport Corporation. Fuel, oil and lubricants made up 27 per cent of total operating expenditure between 2017 and 2022, second only to personnel costs. Over the same period, high speed diesel moved from 57.96 rupees a litre to 98.05, a rise of almost 72 per cent. 

The DPIIT and NCAER study released in 2023 placed India's total logistics cost at 7.97 per cent of GDP. Fuel is the single largest movable component inside that figure. 

The distance travelled to buy distance

Most fleets fuel at a pump that offers credit or a discount, not the pump that is nearest. The gap between those two is dead mileage, and it is paid in the same commodity being bought. 

Field data from a large logistics operator running 3.5 lakh litres a month makes the arithmetic concrete. A six kilometre detour to its chosen pump costs between 2 and 2.5 lakh rupees a month in dead mileage alone, before counting driver hours or the time a vehicle spends in a queue rather than on a route. 

Turnaround is the quieter cost. A trailer that takes 60 to 90 minutes to fuel at a retail outlet is a trailer not earning for that hour and a half, every time. 

The data that arrives too late

State transport undertakings run some of the most disciplined fleet operations in the country. Their fuelling still runs on inventory books. Every litre, for every vehicle, entered by hand, at every depot.

The problem is not accuracy. It is latency. Checking live fuel inventory means moving up a hierarchy, and by the time a number reaches head office it describes a week that has already gone. Settlement is not real time. Log sheets duplicate each other. Depots procuring from multiple sources frequently cannot say how much fuel arrived, or from where. 

A cost recorded this slowly cannot be managed. It can only be reported. 

This is unorganised fuelling

Fuel is the one cost in a transport business that changes daily, and the only one still handled the way it was handled thirty years ago. Bought on payment terms rather than logistics, measured by dip rod, entered by hand, and reconciled a month later. 

Most operators accept that some of it is leaking. Very few can prove where. 

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Sources

• Petroleum Planning and Analysis Cell. All-India Study on Sectoral Demand for Petrol and Diesel, conducted by CRISIL Risk and Infrastructure Solutions, October 2020 to September 2021. 

• Comptroller and Auditor General of India. Performance Audit of Bengaluru Metropolitan Transport Corporation, 2024. 

• Department for Promotion of Industry and Internal Trade and NCAER. Report on Logistics Cost in India, 2023. 

• Operator figures on dead mileage and turnaround time are drawn from Repos field observation and are illustrative of a single large fleet.