The good news about diesel fuel prices is they are only .231 per gallon according to the Department of Energy's National Weekly report. Diesel fuel prices could be .854 like they were the summer of 2008. The bad news about diesel fuel prices is they are at the highest level now at the end of 2010 then they have been all year. The lowest cost for diesel fuel prices in 2010 was January 4, 2010 at .797, so we had almost a 16% increase. In my view, we are looking for the same thing to happen in diesel fuel prices in 2011. That would give us a price of .74. I don't know if it will get that bad but let's look what is facing us for diesel fuel prices in 2011.
• China continues to boom
• Inventory levels continue to go down
• The economy continues to gain steam, which will increase trucking demand
• Congress is talking about a fueling tax increase
• Worldwide increase demand
PRICES
Let's take a look at each of these topics and you will soon realize that most of these issues for diesel fuel prices are out of your control. The things that are in your control like fuel management, fuel cards, mobile fueling will all play a stronger part in your fleet companies success in its fleet management in 2011.
China is a topic that will never go away. They have approximately 1.5 billion people. They don't even put that high a number up in front of McDonalds. These people are going from pulling carts, to riding motorized scooters to buying cars. Last year over this year they used 10% more fuel. They will continue to grow and cause demand issues on the fuel supply chain and a strain on diesel fuel prices.
Inventory level had been at record highs for almost all of 2010 but our diesel fuel prices still went up almost 16%. Now inventory levels are shrinking. This has a lot to do with the economy getting better. I know we all don't see it but the economy at least the trucking industry or fleet companies demand on fuel companies is getting stronger. Refineries had cut down on products and now need to ramp up to handle what is sure to be a large increase in demand for fleet fueling in 2011.
Tax cuts, tax increases, taxes going sideways aren't you sick about hearing about taxes. Obama, Republicans, tea party, coffee drinkers what's next. You heard me save I believe we need a fueling tax increase on both gas prices and diesel fuel prices. We need to cut spending as a government too but that is not going to get us the kinds of roads and infrastructure that we need for the future. Somewhere in 2011, I think a fuel tax increase will be passed. I don't know when they will start to collect the money but it is something that hasn't been raised in 18 years on the Federal level and something at least in my view that does to ensure the safety of our roadway system.
The economy has been off over the last few years just like the United States. There is no doubt when our economy is doing well so does the economies of other countries. Well 2011 is going to be a solid turn around year for the U.S. and every other first world country will follow. This will cause increase demand on mostly diesel fuel because most of the world runs on diesel fuel and not gas. Therefore, diesel fuel prices will be pushed higher.
Now we can also through in currency and a weak U.S. dollar has on crude oil prices but we won't go there. We also won't go down the road that if we start to blend with more bio fuel in 2011 we won't need as much diesel fuel or that will lower diesel fuel prices.
Prepare for the worst and hope for the best. Start to prepare now by reviewing your fuel management program.
Here is a special 5 step plan to look at for your fleet management.
1. Does my fleet companies operation actually have a fuel management program?
2. Who does fuel audits from our fuel companies, fuel card and mobile fueling providers? Is it my fleet manger, fuel manager, clerk or no one?
3. Does my fleet fueling program have fuel savings with fueling discounts, fleet card rebates or could my company be paying to much on diesel fuel prices?
4. Within 5 minutes can I look up and see how many gallons of fleet fueling did 1 truck take over the last month or a branch or any information that would be useful?
5. When I think about my fuel management system, do I feel good or do I try to think of something else that will make me feel better?
If your answers to any of these fuel management solution questions, did not come back positive, do yourself and your company and favor. Take action now. Get fuel savings.
Happy New Year, Diesel Fuel Prices!
Glen Sokolis
President
Sokolis Group
Fuel Management & Fuel Consulting
Industry Expert
http://www.sokolisgroup.com
gsokolis@sokolisgroup.com
0 comments:
Post a Comment