Article

Looking Back: 2009 Fuel Management in Review

December 2009, TruckingInfo.com - Feature

by Glen Sokolis, Sokolis Group

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In 2009, things started off like a lamb and at times felt like a lion, but we certainly didn't see the scary lions in fleet fuel buying, as we did in 2008.
The year started with national gas prices at $1.639 a gallon and diesel fuel at $2.405 a gallon, great numbers if you're a fuel manager overseeing your fuel management program. It was also around this time that Barack Obama was sworn into the White House, becoming the U.S.'s 44th president and bearing the weight of the recession on his shoulders. The winter season of early 2009 unveiled a staggering amount of crude oil inventories, so much so that companies were leasing out tankers to store oil out in the sea. The price for a barrel of crude was around $33 a barrel. Things seemed to turn around slowly but surely.

The early spring brought not only unmatched amounts of unemployment, but the gradual rise to $40 a barrel in crude oil. April saw a national average for retail gasoline at $2.04; this was amid news of major car manufacturer Chrysler filing for bankruptcy and other vehicle manufacturers discontinuing unpopular models. A few include the Saturn Sky and possible the entire lineup, Isuzu Ascender, Hyundai Veracruz, Honda s2000 and Hummer H3. With the economy seemingly not back on its feet, a look at oil was the only lifeline to a positive upturn.

Mid-year arrived with oil above $60 a barrel, and the stockpiles kept on building to 4.38 million barrels. With the nation focused on the fuel industry, it's no wonder it was also a tough year for the climate. Getting on board to reduce carbon emissions was a goal of many but a success of few. The thoughts of an emissions cap or tax weighted heavily on the minds of fleets, as a tax or cap would discourage the use of oil and put trucking at the mercy of newer, expensive hybrid vehicles or retrofit current trucks with carbon reducing equipment. With a myriad of hybrid vehicles being tested among the general public, only a select few fleets have dabbled in the hybrid world. For example, Smith Electric Vehicles just last week pulled the trigger with seven all-electric trucks, customers for these zero emissions vehicle include Frito-Lay, Staples and Coca-cola. However, until any of these laws or regulations pass, the fleet world will remain focused on fuel management.

This year has rounded itself out with August showing an increase of 20.2 percent in fuel in a matter of three weeks at one point. But, as with all things fuel related, the markings go down as fast as they can go up. After months of a steady increase, October saw a fall, and it was directly attributed to consumers driving less and cutting back on household energy use. It looks like the demand has fallen as the supply only increased. In fact, Valero Energy Corp. announced it was permanently closing its Delaware refinery, putting over 500 people out of jobs.

As the holidays draw near and people take the time to slow down, oil has remained around the $70 mark, and seems to be holding up nicely there as the inventories still rise. And while there will be much traveling for the holiday, there will also be speculation on the new year. After all, 2009 did start at a low of $33 and is finishing at $70. Here is to a happy new year in fuel management and lower fleet fueling costs.

Glen Sokolis is president of Sokolis Group, a nationwide fuel management and fuel consulting company, www.FuelManagementSokolisGroup.com. You can reach him at gsokolis@sokolisgroup.com or (267) 482-6160.

Previous installments of "Friday Fuel:"
* "Successful Fuel Management Program Equals Discipline", 9-11-09
* "Who's Watching Your Fuel Program," 9-18-09
* "Fleet Fuel Margins: Are You Paying Too Much?" 9-25-09
* "How Do You Audit Your Fleet Fuel Invoices?" 10-2-09
* "Fleet Fuel Price Negotiating: Details, Details", 10-9-09
* "Mobile On-Site Fueling", 10-16-09
* "The Bees Are Still Buzzing: Handling Fuel on a Daily Basis", 10-23-09
* "Fleet Fuel Card Shopping", 10-30-09
* "Is Your Fuel Management Ready for Winter?", 11-6-09
* "Don't Let the Weather Freeze Your Deliveries", 11-13-09
* "Fuel Management or Fuel Inventory? That is the Question", 11-20-09
*
"Put Your Fleet Fueling Policy in Place For 2010, Part I", 12-4-09
*
"Put Your Fleet Fueling Policy in Place For 2010, Part II", 12-11-09
*
"Be Safe, Not Sorry With Fuel Management During the Holidays", 12-18-09

Truckinginfo.com is posting this installment of Friday Fuel on Wednesday because of the Christmas holiday. Friday Fuel will resume its normal schedule on Jan. 8, 2010.

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