Diesel prices remain above $3 per gallon but are down for second straight week

Diesel prices dipped 0.9 cents to $3.162 per gallon for the week of November 29, according to data from the Department of Energy’s Energy Information Administration (EIA).

This reading follows a 1.3 cent drop to $3.176 per gallon for the week of November 22 from $3.184 for the week of November 15, which was the highest level diesel prices have hit since $3.288 per gallon from the week of October 27, 2008. The week of November 15 is now the high water mark for 2010 diesel prices, topping $3.127 per gallon from the week of May 10.

The current average price per gallon of diesel is 38.7 cents higher than it was a year ago, said EIA.

Diesel prices have been at $3 per gallon or more for ten consecutive weeks. Prior to the week of October 4, when diesel prices hit $3.00 per gallon, the price per gallon of diesel was below the $3.00 mark for 18 straight weeks. But the recent rise in prices is in line with gains in the price per barrel of crude oil, which has been hovering in the mid-to-low $80s, on average, during the same period. 

As of press time oil barrel prices were at $84.88 a barrel in electronic trading on the New York Mercantile Exchange, according to a Bloomberg report. The report added that the price has dropped in recent days due to the European Union potentially having to bail out more member states after Ireland agreed to a rescue package from the EU and the International Monetary Fund.

The EIA is calling for 2010 crude oil prices to hit $78.80 per barrel and 2011 prices at $85.17 per barrel, according to its short-term energy outlook. Both figures are above previous estimates of $77.97 per barrel for 2010 and $83.00 per barrel for 2011. 

As oil prices ride the wave of fluctuating prices, a recent Logistics Management reader survey of about 150 logistics, supply chain, and transportation managers found interesting disparities regarding how much shippers’ average fuel surcharges were above their base rates.

The survey revealed that 20 percent felt average fuel surcharges were 6-10 percent above base rates as did another 20 percent say average fuel surcharges were 11-15 percent above base rates. 19 percent said average fuel surcharges were in the 0-5 percent range above base rates, with 17 percent of respondents at 16-20 percent and 9 percent saying average fuel surcharges were 21 percent above base rates.

LTL shippers overall said their average percentage fuel surcharge was 13.83 percent, and truckload shippers said truckload shippers said their average was 17.05 percent. 84 percent of respondents expect to pay higher fuel surcharges in the coming months. And if prices rise in the future 65 percent of respondents plan to raise or adjust their freight budgets to cover higher than expected prices.