Diesel prices head up 3.9 cents to $3.867 per gallon, reports EIA
This marks the second straight weekly increase on the heels of a six-week stretch of declining prices.
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Diesel prices increased 3.9 cents to $3.867 per gallon, according to the Department of Energy’s Energy Information Administration (EIA).
This marks the second straight weekly increase on the heels of a six-week stretch of declining prices, during which time prices dropped a cumulative 7.3 cents. But over the last two weeks (the average price per gallon was up 1.1 cents last week), that difference has nearly been made up with a 5 cent gain over the last two weeks.
This week’s tally marks the highest average price per gallon for diesel in the last seven weeks, going back to the week of June 3, when it hit $3.869 per gallon. What’s more, according to EIA data, it is the single highest weekly increase since rising 5.3 cents the week of February 18.
And on an annual basis, the average price per gallon is up 17.2 cents.
Prior to the gains of the last two weeks, the previous six straight weeks of declines were preceded by a two-week stretch which saw prices rise a cumulative 4.5 cents.
Prior to the two-week stretch of increases, diesel prices declined for ten straight weeks and dropped a cumulative 31.4 cents. Prior to the previous ten weeks of declining prices, diesel prices rose a cumulative 26.5 cents over a six week span.
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.
UPS Freight President Jack Holmes said at the eyefortransport 3PL Summit that fuel increases need to be taken into account as part of the shipper-carrier relationship.
“A carrier—who is a partner—simply passing expenses on to [a shipper] is not in my opinion a carrier you want to do business with,” said Holmes. “The one you want to do business with is the one who will tell you ‘this is what has happened and here is what we will do to mitigate that expense’ and hopefully you do things on fuel efficiency and idle time that get you closer to negating the impact of those things on your business but those are the differences between a vendor relationship and a partner relationship—which does things to help each other.”
When asked if they expect to pay higher fuel surcharges in the coming months, a recent Logistics Management reader study of roughly 420 shippers found that 39.1 percent said yes they did, 44.1 percent said they did not expect to have to pay higher fuel surcharges, with 16.8 percent stating they were unsure.
A major contributor to the recent spike in gasoline prices is Middle East tension among oil producing countries.
A Boston Globe report observed that “the civil unrest and military coup in Egypt — a relatively small exporter of crude oil — and the ongoing in-fighting in Syria have energy markets worried that the unrest could spread to other oil-producing countries in the region, disrupting supplies.”
As of press time, the average price per barrel of crude oil on the New York Mercantile Exchange was $107.01, with the Associated Press reporting that oil is up about 10 percent so far this month and has been jolted higher by unexpectedly sharp drops in U.S. crude and gasoline inventories, which suggest stronger demand.
About the AuthorJeff Berman, Group News Editor Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman
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