You spend months putting together your fleet management budget. Looking at all line items to determine if you have accounted for everything your fleet management department needs or if you’re over budget and need to cut. There is always that one line item that worries because it is so unpredictable, fueling. Whether it is your diesel fuel price or gas price for your fuel management, you know in almost all cases it can go anywhere.
This week diesel fuel prices rose another 3.9 cents according to the Department of Energy. This is the 12th straight increase for diesel fuel. One year ago diesel fuel prices were 74.1 cents cheaper nationally then they are today. Your fuel management systems are about to really get tested.
Crude oil prices are up 9.6% to $94.49 a barrel since Friday. In 2 words, Middle East.
Saudi Arabia is saying it will protect production. That is nice to say but I am not sure if they really can feel good about that. After all don’t you think other countries leaders who have had changes the past few weeks, felt the same way? What happens is the Saudi people strike? The oil might be protected but it isn’t going anywhere. That is not going to be a positive impact on your diesel fuel prices. I don’t believe it’s time to panic. I think it’s a time to be aware of what is happening. For some many years the U.S. has lended its support against others trying to invade or disrupt that area of the world. We all knew it was about the oil. What we never figured is their own people would turn on their governments.
Today, I listen to a pod cast with the CEO of Gulf Oil, Joe Petrowski. He believed that diesel fuel and gas prices were going to move much higher. He felt almost certain that we would see $125 crude oil prices. He felt the situation was disheartening. Joe is a very bright man and has a wealth of knowledge around fuel management. While I believe fleet fueling prices will move higher over the next few weeks, I don’t believe they will be maintained long term. That is not to say that we won’t be around $3.80 a gallon for diesel fuel prices and $3.50 for gas. We will have to let this run its course and hopefully, your fleet management solutions work.