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Transportation news: Diesel prices return to the $3 per gallon mark

By Jeff Berman, Group News Editor
October 05, 2010

After an 18-week respite, the average price per gallon of diesel gasoline is back in $3 per gallon territory, according to data released this week by the Department of Energy’s Energy Information Administration.

For the week of October 4, the EIA reported that average diesel prices are exactly $3 per gallon, representing a 4.9 percent increase from the week of September 27.

In recent weeks diesel prices have been fluctuating, with this week’s 4.9 cent gain preceded by a 1.9 cent decline to $2.960 per gallon for the week of September 20. And prior to that, diesel prices had been trending down since hitting $2.991 the week of August 9, dropping a total of six cents from August 9 to September 6, according to the EIA.

The current average price per gallon of diesel is 41.8 cents higher than it was a year ago, and it is 12.7 cents below the 2010 weekly high of $3.127 per gallon from the week of May 10.

The EIA is calling for 2010 crude oil prices to hit $77.37 per barrel and 2011 prices at $82.00 per barrel, according to its short-term energy outlook. Both figures are below recent estimates of $79.13 for 2010 and $83.50 for 2011. Current oil prices are at $82.30 per barrel as of press time.

The recent upticks in prices may be related to global currency devaluations and disruptions at the largest oil port in France, where workers have been on strike for more than a week, according to a MarketWatch report. 

Prior to this recent uptick, oil and gasoline prices were relatively low due to higher inventories signaling weaker demand and sluggish economic growth. And a recent Associated Press report stated that while the price per barrel had been in the $75 per barrel range since early summer, some analysts expect high crude prices to weigh on prices even if the economy expands more than expected over the next year. 

As LM has reported, even though diesel prices appear to be in check for the time being, freight transportation stakeholders maintain that there is no real rhyme or reason when it comes to assessing the string of rising and falling fuel prices.

Some experts say that the there has never been a period of volatility in fuel prices like there has been in the last year. And with prices currently down by no means indicates prices will stay down or sharply go up.

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.

About the Author

Jeff Berman headshot
Jeff 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. .(JavaScript must be enabled to view this email address).


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