Diesel fuel prices fell for the eighth week in the past ten, declining 6.2 cents to $3.888 a gallon, the Department of Energy said Monday.
Look for your fleet fueling prices of diesel fuel prices and gas prices to take a turn down over the next couple of weeks. A lot of action is happening in the oil world. Fuel prices were falling several dollars a barrel already this week which is good news to your fuel management programs. Then what I believe was a little out of the blue, the U.S. Strategic Petroleum Reserve decides to release 60 million barrel of oil over the next 30 days to help reduce fuel prices. Wow! Lower diesel fuel prices please to meet you. For some companies this might be the difference between having a good year or having a poor year. A company’s fuel management solutions are usually the keep to help drive lower diesel fuel prices.
Exxon, Shell, BP fighting over fuel prices? No. I said, giants Saudi Arabia, Iran and the rest of OPEC are fighting over increase production should happen. More crude oil produced should make way for lower diesel fuel prices and gas prices.
The answer is yes. Now let me explain what I mean by that. Four weeks ago we saw crude oil prices plunge from $113 to $97 a barrel followed by a drop in diesel fuel prices at the pump, and in bulk fueling or mobile fueling where your company has a fixed margin over a benchmark price. Gasoline pump prices took a bit longer to go down, but they did, if only just a little bit. Then, as we check prices again now, crude oil is back up to $100 a barrel. So, what gives? Let’s talk about barrel vs. pump prices first. As I have mentioned time and time again, a $1 drop in barrel prices for crude oil usually translates to a 2 to 3 cent drop in diesel fuel or gas prices at the pump. So, since barrel crude oil has averaged a $13 drop in prices lately, diesel fuel prices at the pump should be at least 26 cents – maybe 39 cents, cheaper a gallon. If you follow the DOE National diesel fuel prices that are reported weekly, you noticed that on May 2, 2011 diesel was at its peak of $4.12 a gallon. Today, on June 3, just one month later, as I sit and write this, the DOE National diesel fuel price is down to $3.94. Which means you should see an 18-cents per gallon savings in our fleet fueling costs. But, it sure takes a long time for decreases in barrel pricing to get to the pump and actually realized as fuel cost savings on your bottom line.
Listen. There is no question that most Americans are feeling pinched at the pump. Whether you are buying gas for your family car or diesel for your fleet vehicles, the higher fuel prices certainly hurt. But, why?