Diesel prices are down for ninth straight week

Diesel prices dipped for the seventh straight week, according to data released by the Department of Energy’s Energy Information Administration (EIA) this week.

The average price per gallon fell 3.6 cents to $3.851 per gallon, following declines of 5.5 cents, 1.6 cents, and 1.3 cents, respectively, over the previous three weeks.

Over the past nine weeks, prices have fallen a cumulative 30.8 cents, with this week’s price marking the lowest level for diesel since $3.85 per gallon the week of August 6. 

Prior to these past nine weeks of declining prices, diesel prices rose a cumulative 26.5 cents over a six week span.

On an annual basis, the average price per gallon is down 22.2 cents.

The EIA recently updated its short-term energy outlook. It is now calling for diesel prices to average $3.90 per gallon in 2013 (down from $3.92) and $3.80 in 2014 (down from $3.82), with WTI crude oil now pegged at $91.92 in 2013 (up from $92.81) and the 2014 forecast remaining unchanged at $92.17.

Regardless of the fluctuation in diesel prices, shippers are cognizant of the impact diesel prices can have on their bottom line—for better or worse.

And they continue to be proactive on that front, too, by taking steps to reduce mileage and transit lengths when possible as well as cut down on empty miles. And even through shippers want to adjust budgets in order to offset the increased costs higher fuel prices bring, it is not always an easy thing to manage.

Shippers have told LM that adjusting budgets is only part of the solution when it comes to dealing—and living—with fuel price fluctuation. 

This was evident in the results of a recent Logistics Management reader study, which polled 420 respondents on their diesel spend.

Nearly 16 percent (15.5) of respondents said that their average fuel surcharge is less than 5 percent above base rates, and 13.8 percent said it was 6-to-10 percent higher. And 14.5 percent said it was 11-to-15 percent higher, with 11.9 percent indicating it was 16-to-20 percent higher. More than 30 percent—33.3 percent—said it was more than 20 percent higher, and 11 percent said they were unsure.

When asked if they expect to pay higher fuel surcharges in the coming months, 39.1 percent of the LM survey respondents said yes, with 44.1 percent saying they did not expect to, and 16.8 percent unsure.

And if fuel prices rise in the coming months, 67 percent said they would raise or adjust their freight budgets to cover higher than budgeted for fuel prices and 33 percent saying they would take no action.