The old expression, “What goes up must come down” is happening again with crude oil. Over the past several months, we have seen a barrel of crude oil go from $107 back in June 2014 to under $65 earlier this week. And, it doesn’t look like the price of crude oil will be rebounding much higher anytime soon. Fuel purchasers should all be benefiting since the price of crude oil has a direct impact on gas and diesel fuel prices.
Well not all fuel cards will be in a “cloud” and “cloud” might be a little bit off but it’s close. Comdata has come out with a fuel card that you don’t even need a card to get the diesel fuel. The card-less transactions use an RFID tag to automate the fueling process, which should decrease the amount of time drivers spend at the fleet fueling island. More important this should reduce the risk of fraudulent transactions by shutting off the pump when the truck pulls away.
I spent an hour on the phone last week with one of the industry’s top futures specialist from a leading firm. Since we have clients that do work with them and I have known her for 15 years we talked about the oil market at length. Her view based upon their charts and continued Eurozone economic issues is that the market had support to go below $74.95 in the next coming weeks.
It’s really hard to believe that diesel fuel prices and gas prices are falling, especially if your local gas station hasn’t lowered prices yet. Ok, I realize that MOST of us have not seen the lower fleet fueling prices at the pump yet. This is basically because most retail locations are taking their time lowering their prices—and your fueling costs. But yesterday, in the fairly small town where I live, the price for gas at a low-cost retail station was down to $3.93 a gallon. A half mile away it was $4.09 a gallon, and half mile in the other direction it was $4.19 a gallon. Knowing the fueling market as well as I do I recognize that even that low-cost retail station is making a nice margin. The others are knocking it out of the park, but that isn’t good for consumers. Keep watching, prices will drop down near you soon, fueling costs will get better, trust me.
It’s easy to take a seat on the sidelines and believe all of the things you read in the headlines about diesel fuel prices and gas prices going even higher. Of course those kinds of stories make news and help ratings. So, to answer the question in my own headline, ‘Are diesel fuel prices going up?’ – you betcha.
Yes, the DOE national weekly average for diesel fuel prices went down for the first time since November 2011. But don’t get too excited about your fuel management budget because they only went down $.001. That combined with a continued increase in gas prices does not look good for your tanks. Certainly your fleet fueling program will continue to feel pressure.
Although, I think we could all use a little luck o’the Irish this St. Patrick’s Day. And, who wouldn’t like to find a pot of gold at the end of the rainbow, or at least some extra “green” added to their corporate bottom line? This is especially true for those of us working hard in the fleet fuel management industry. We may be feeling green today, but not as it relates to Ireland and shamrocks. We are just sick. Sick of the uncertainty in the Middle East and subsequent skyrocketing cost of diesel fuel and gas.
Headlines everywhere screaming gloom and doom; uncertainty in the Middle East, shaky stock market, oil prices up again week after week after week. And to pour salt on our wounds, the EIA (U.S. Energy Information Administration) reported the second largest one-week increase in gasoline prices in past 20 years! This hurts the general public, but is especially painful to those of us in the fleet fuel management industry. People feel stuck, helpless. In the midst of all the bad news wouldn’t you like a glimpse good ol’ perseverance?
Are you a fleet manager or fuel manager? Are you the president or CFO of a fleet company concerned about your company’s bottom line, again? Are you tired of sitting on the edge of your seat, sweating, worrying and waiting for the Department of Energy to report that diesel fuel prices are up per gallon for the nth week in a row? Accept the inevitable; diesel’s national average price will be what it will be. You can’t control it. It’s out of your hands. However, do not throw in the towel just yet. Take a deep breath, sit back in your chair, roll up your sleeves and empower yourself. Now is the time to gain control over those things that you CAN control. Be your own superhero. Help save your fleet management company. Save time. Save money.
The Department of Energy (DOE) just released diesel fuel pricing data that has diesel fuel prices rising for the 10th straight week jumping 7.5 cents to $3.513. It’s the largest increase since December 6, 2010 early in this rise of fleet fueling prices for trucking. This increase puts the diesel fuel price 74.4 cents higher than this same time last year. Is there any good news in the fuel management world or is everything glum?
Well, some good news is that crude oil prices have come down over the past week. Things have settled a little bit in Egypt and it usually takes a solid week or two before diesel fuel prices catch up at retail locations as compared to the open market. In a nutshell, if nothing crazy happens, your diesel fuel prices should be going down to that $3.40 level soon. I know, it’s not great, but it’s still better than $3.513 for fleet fueling this week.
The key right now to most of your fuel management solutions is to get to the core of your fueling programs. If you feel like your fleet company’s understanding might not be up to par, then it’s time for a fuel analysis on the who, what, where, how and why of your fuel management.
Who?: Who is the person in your fleet company’s organization that really has his finger on this? Is it you? Is it the fleet manager? Fuel manager? (Maybe in title only.) Fleet fuel manager? Director? Or maybe, it’s really no one at all.
What?: As in– what does your fleet fueling program look like? “What does that mean?” you might ask. Do you have as many fleet cards or fuel card companies as you do locations? Are you using mobile fueling and not sure why? Or, do you think you should be using mobile fueling but don’t know how to do it? Do you have a fuel saving plan as part of the program?
Where?: Where do your trucks go to buy diesel fuel? Are you using truck stops, card locks or do you have a mobile fueling company coming on location to fuel your trucks where they are parked? How do you know what fleet management approach is best for your fleet company’s vehicles?
How?: How are you going to improve your diesel fuel buying if you already believe you are buying well? Another question is how do you know that you really are buying well? Who told you that? How can you be certain? How do your fueling purchases compare against other fleet companies? How are you going to change your fuel management system? It’s hard and even though it’s a big expense item most companies usually push it to the back burner. How do your fuel cards or fleet cards work? How is the fuel auditing being done on all your fueling transactions?
Why?: Why are diesel fuel additives so expensive? Why does your fleet credit card charge a fee? Why does your fuel inventory never match at the end of the month? Why don’t you see fuel savings when your fleet management keeps putting new fuel management systems in place?
These are very important questions that most fleet managers or someone in your organization should really be looking at. As I have said before, and it might sound crazy, but we talk with more companies that need our help than don’t need help. Most of us have heard the expression that a little knowledge is a dangerous thing. This is diesel fuel buying we are talking about. It’s not time to be dangerous, its time to be smart. Increase your knowledge and get the answers to your questions. There is safe ground to stand on and you can improve your company’s bottom line. Consult with a fleet fueling expert and start implementing a fuel management program that you can count on.