Fuel Management 101

If you’re responsible for keeping your organization’s vehicles fueled — whether that’s school buses, public works trucks, or city service vehicles — you already know it’s no small task.

Fuel costs are volatile. Budgets are tight. And trying to predict usage a year in advance feels like rolling the dice. On top of that, you might be juggling spreadsheets, coordinating with vendors, fielding last-minute delivery problems, and hoping your fuel doesn’t run out right before a cold snap or other big weather event.

You’re not alone. These are common challenges for school districts, local governments, and other public entities across Texas. There are ways, however, to make your fuel costs more predictable, your operations more efficient, and your time better spent. Read on to learn more about how fuel management works and how tools like fuel pooling, tank monitoring, and winterization may save time and resources.

Fuel Pool and Other Fixed-Rate Contracts

A fuel pool is a way for governmental entities to combine their purchasing power and gain competitive pricing on a large volume of fuel. Instead of each entity going at it alone, participants combine their volumes so they can lock in favorable terms.

When you participate in the TASB Energy Cooperative fuel pool, you’re not just another small buyer in a volatile market. You benefit from the combined purchasing power of local governments that committed to 2.8 million gallons in the spring of 2025 alone.

What the Fuel Pool Looks Like in Practice

• You commit to buying a set number of gallons for a set price, usually over a 12-month period.
  • You decide how many gallons based on your unique needs.
  • You don’t have to commit your entire fuel supply (more on that later).
• The price you pay doesn’t change, no matter what happens in the fuel market.
• You can still place fuel purchases outside of the pool when you need them.
• Your pricing reflects the combined strength of all participating members, not just your own order volume.

The Big Benefits: Certainty, Stability, and Savings

Locking in a fixed rate contract yourself or through the pool helps protects your organization from pricing spikes caused by market volatility. That means:

• Budget certainty: You know what price you’ll pay for your committed gallons throughout your contract term.
• Protection from price swings: If market prices increase significantly, your price stays the same.
• Save administrative resources: No need to constantly shop prices or worry about the impact that the market will have on your fuel budget.

You can access all of this at no cost. Membership in the TASB Energy Cooperative is free with no obligation to purchase. There are two requirements for participating in TASB Energy Cooperative's Fuel Program:

1. Become a TASB Energy Cooperative Member. See how to join.
2. Ensure you have fuel tanks available.

How Much Fuel Should You Commit To?

This is one of the most important questions you’ll face in the program and getting it right can make a big difference.

One common rule of thumb: commit to about 75-80% of your annual fuel usage. Not committing 100% gives you flexibility if your fleet runs fewer miles than expected or you have unexpected downtime. You don’t want to be stuck paying for gallons you didn’t use.

By committing to 75-80%, you lock in a stable price for most of your fuel but leave room to adjust if your actual needs change. The remaining 20-25% can be purchased later at market rates (also called rack or OPIS pricing), depending on what makes the most sense at the time.

This approach also allows you to take advantage of market dips. If prices suddenly drop, you’ve got some wiggle room to supplement your remaining needs at a lower rate.

Spot Purchase Options

Rack and OPIS purchases are two flexible purchasing methods you can use to supplement your supply.

Rack pricing means you’re paying the going wholesale market price at the time of delivery. It’s simple, transparent, and often includes freight in the per-gallon price.

OPIS pricing is based on a daily industry index (Oil Price Information Service). It floats with the market and includes a small margin from the vendor.

Both options give you flexibility when you’ve used up your contracted gallons or didn’t commit to the pool at all. It’s also useful for topping off tanks before a major weather event or covering temporary spikes in usage.

The TASB Energy Cooperative works with awarded vendors like Mansfield Energy, Colonial Oil, and Sun Coast Resources to offer both fixed and rack/OPIS options, so you’re never stuck scrambling when needs shift.

Freight Cost and Delivery Schedule Implications

Freight (delivery) costs are a significant but sometimes overlooked component of fuel budgets. Unlike retail fueling (where transport cost is baked into the pump price), bulk fuel deliveries often include a delivery fee or freight surcharge.

Key factors that drive freight cost:

• Distance from fuel terminal
• Delivery volume (drop size)
• Timing and urgency

It’s not just the price of gasoline or diesel itself, but also the cost to get it delivered to your tanks that matters. For example, if freight fees add 10¢ per gallon and a member uses 100,000 gallons a year, that’s an extra $10,000 to account for in the fuel budget. Understanding and anticipating these costs is the first step in controlling them.

Careful management of the delivery schedule can yield both financial savings and operational reliability. Consider the following strategies to optimize your fuel delivery schedule. Consider the following strategies to optimize your fuel delivery schedule:

• Align Orders with Usage Patterns: Review your organization’s fuel usage and set up a predictable ordering schedule that fits your consumption.
• Optimize Drop Size and Consolidate Deliveries: When possible, order larger volumes less frequently rather than many small frequent drops. If you have multiple tanks or fuel types (diesel and gasoline), try to schedule their refills together so a single tanker truck can deliver both during one trip. Consolidating orders reduces the number of “drop fees” or call-out charges you may incur. Depending on your specific needs, you may consider a larger storage tank to accommodate bigger deliveries; the up-front cost can pay off in lower delivery frequency.
• Maintain Buffer Stock to Avoid Emergencies: A critical scheduling goal is never running out of fuel, since emergency refueling is expensive. Set a reorder threshold (e.g., when your tank is 25% full) that triggers a new order well before you hit empty. Members can use tank monitoring systems to get alerts when fuel falls below a set level. Modern tank monitors provide real-time inventory visibility and even predictive forecasts of when you’ll need fuel next. 
• Schedule Deliveries for Business Hours: Whenever possible, arrange for fuel drops during regular business hours on weekdays. Deliveries scheduled at night or on weekends/holidays can come with premium rates.

By implementing these strategies, your organization can potentially minimize delivery costs and reduce the risk of empty tanks.

Tank Management Impact

It’s easy to forget how important tank-level data is — until you run out of fuel at inopportune times. That’s where tank monitoring systems can come in handy.

These devices keep track of how much fuel is in your tank at all times and can even send automatic alerts when levels get low. Some can be integrated directly with your provider’s delivery system, so you get automatic refills without having to make a call.

Benefits of tank monitoring include:

• Avoiding emergency refills, which often cost more
• Preventing runouts that can halt operations
• Tracking consumption trends so you can plan better for the future
• Catching leaks or theft early

If you’ve ever played the guessing game with your fuel levels, you already know how valuable this visibility can be.

Why Winterizing Your Tanks Matters

Winterization isn’t just for the Panhandle. Even milder regions of the state can experience temperatures low enough to cause problems, especially with untreated diesel fuel. If your entity has experienced a Texas cold snap, you know how it can wreak havoc on fuel systems. Tank winterization helps prevent that.

Here’s what it involves:

• Removing water from tanks (frozen water = frozen fuel lines)
• Treating fuel with anti-gel additives
• Switching to winter-blend diesel when temperatures drop
• Keeping tanks full to reduce condensation
• Checking and replacing filters before cold weather hits

We recommend preparing ahead of time — ideally by early fall — so your fleet isn’t caught off guard.

Fuel Management Doesn’t Have to Be a Gamble

Fuel might be one of your biggest operational expenses, but it doesn’t have to be your biggest headache.  With the right tools, suppliers, and strategies in place, you can manage your fuel supply with more confidence and fewer surprises.

Set yourself up for smoother operations and more predictable budgets by:

• Joining a fuel pool or signing an individual fixed-rate contract
• Committing wisely (not too much, not too little)
• Supplementing smartly with rack/OPIS pricing
• Making sure you consider freight and its impact on your budget

The TASB Energy Cooperative exists to help public entities like yours make that happen. Whether you’re a fuel-buying pro or new to the job, you don’t have to do it alone. There’s a system that works and people are ready to help.

To discuss your specific fuel requirements, call or email Adrian Porras, Energy Director.