Diesel prices are up for the third straight week

On the heels of a 12-week run which saw the price per gallon of diesel fall a cumulative 50 cents, diesel prices are up for the third straight week, according to the Department of Energy’s Energy Information Administration (EIA).

The average price per gallon increased 8.8 cents to $3.783 per gallon. Prices over the last three weeks have risen by a cumulative 13.5 cents. Based on EIA data, this nearly 9 cent hike is the single largest weekly price increase since the week of February 13, when prices rose 8.7 cents to $3.943 per gallon.

In its recently updated short-term energy outlook, the EIA is calling for diesel prices to average $3.90 per gallon in 2012 and $3.87 in 2013 (down from previous estimates of $4.06 and $4.03, respectively), with oil expected to hit $96.80 in 2012 and $97.00 in 2013 (down from previous estimates of $104.12 and $103.75, respectively).

Even with low prices for diesel, shippers continue to keep a watchful eye on fuel prices and are taking steps to reduce mileage and cut down on empty miles. This was made clear at last month’s eyefortransport 3PL Summit in Chicago. Many shippers told LM that they are constantly monitoring fuel prices, as they relate to freight rates and the overall costs of doing business.

And as previously reported by LM, 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.

But even with recent increases, shippers have gotten some pricing relief with the cost per gallon of diesel at relatively low levels still, especially when compared to a year ago. 

An April conference call hosted by Stifel Nicolaus last, which featured Tom O’Brien CEO, TravelCenters of America and Petro Stopping Centers and Mark Hazelwood Executive Vice President, Pilot Flying J Travel, noted that “diesel fuel price will trend higher, perhaps more quickly and with more volatility than oil prices, as diesel is in great demand around the world,” adding that [t]he demand for highway diesel fuel in the U.S. has dropped by 25%+ since 2007 due to a variety of factors.”