Diesel prices are up for first time in 3 weeks, says EIA
October 10, 2012
Diesel prices rose 1.5 cents to $4.094 per gallon, according to the Department of Energy’s Energy Information Administration (EIA).
This marks the first increase since the week of September 17, which was the last week of an 11-week run, during which time prices rose a cumulative 48.7 cents. And on a year-over-year basis prices are up 37.3 cents.
In its recently updated short-term energy outlook, the EIA is calling for diesel prices to average $3.96 per gallon in 2012 and $3.73 in 2013, with WTI crude oil expected to hit $95.66 per barrel in 2012 and $92.63 in 2013.
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.
What’s more, shippers have repeatedly told LM they are constantly monitoring fuel prices, as they relate to freight rates and the overall costs of doing business.
And shippers continue to take steps to minimize the impact of fluctuating fuel costs. Over the years, they have maintained that this is imperative as higher diesel prices have the potential to hinder growth and increase operating costs, which will, in turn, force them to raise rates and offset the increased prices to consumers.
What’s more, due to the economics driving the increases in global oil prices, shippers really don’t have any choice in the matter, shippers say.
“Shippers will have to pay to get their goods to market even as the price of fuel increases,” a shipper told LM. “The fuel surcharge (FSC) is not necessarily an evil thing. Shippers need to [partner] with transportation and logistics services companies and realize that without an FSC these companies would not likely be able to stay in business…but shippers need to do their homework to determine what the actual costs are and what percent they should pay to carriers.”
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