The Department of Energy continued to boost its projected price of diesel fuel prices, saying it will average $3.40 this year — a jump of 17 cents from its forecast last month. We know or at least we should know by now that the DOE projections on fleet fueling costs are always lower and sometimes much lower than what our fueling expectation are for diesel fuel prices. The $3.40 projection is an increase from $2.99 average last year, DOE said in its monthly short-term energy outlook released Tuesday. The price will climb to an average $3.52 for diesel fuel prices in 2012, DOE said.
Gasoline also will increase, to an average $3.17 this year, also up 17 cents from last month’s forecast. That’s up from a $2.78 average last year, DOE said, and the motor fueling will rise to average $3.29 next year. “Rising crude oil prices are the primary reason for higher retail prices, but higher gasoline and distillate refining margins are also expected to contribute to higher retail prices,” the report said. Most fleet management budgets will be shocked by the $3.40 diesel fuel prices but I think the DOE could be off 10% for fleet fueling raising that number closer to the $3.70 range. Taking the right steps now with your fuel management system will help your fuel savings and fleet management concerns later.
Listen, if you didn’t do a fueling hedge a couple of months ago, you still can but most fleet companies won’t because they feel they are complex and a risk. With that said, we don’t necessary agree that having some of your fueling in a hedge or a fueling collar or call is bad. If you don’t have them in place as part of your fleet management solutions or aren’t going to put them in place, then your diesel fuel prices will be going up. The question is by how much? Does your fleet manager understand the fueling market? Do you think your company has full control of your fleet fueling or do you need some fleet fuel management help? If you think you need help, think of it this way. If you boat has a leak, you would get it fixed, you wouldn’t wait until you had to pull out the life preservers. Would you really want to do that same sort of thing with your fueling budget that for most fleet companies represents one of the largest expenses on the profit and loss statement?
The answer is no of course you don’t want your fleet management budget or fuel management waiting after the fact. Will you? Will you? Fuel cards, fleet cards, mobile fueling, fuel audits do you have the staff, the time to make sure when your diesel fuel prices go up they are being watched and helping your control the increases.
With these diesel fuel prices going higher, it can certainly hurt the economic recovery that the country is currently happening. Upcoming blogs. Is OPEC the bad guy? Do you need diesel fuel additives in cold weather?