A system and method for optimizing the consumption of fuel in a hybrid electric vehicle is disclosed. A Hybrid Efficiency Index (HEI) is used to quantify a relative efficiency advantage achievable with the expenditure of electrical energy at a given power level. Also disclosed is a minimum efficiency threshold useful for determining which HEI values will result in the optimum use of electrical energy throughout the operation of the vehicle. Methods for adjusting the minimum efficiency threshold with respect to regenerative braking events, storage capacity in the energy storage system, along with other aspects are disclosed as well.