Are you ready for the possible rising oil price storm that looks like it could hit your fleet fueling budget in 2010?
Let's take a step back and remind you where fleet fuel prices have been for both diesel fuel and gas. These are Department of Energy national averages, so they could be slightly higher or lower in your area. We have never been big fans of the DOE national average for fleet fuel. As one fuel expert once said to me, "It's like using a globe to find your house!"
Just 24 months ago, diesel fuel prices were $3.387 a gallon, while gas prices were $3.135 a gallon.
Twelve months ago diesel fuel prices were $2.299 a gallon, and gas prices were $1.72 a gallon.
In January 2010, diesel fuel prices were $2.882 a gallon, while gas prices were $2.677 a gallon.
If you even remember that this happened, you would say OK, prices came down $1.10 from 2008 to 2009 and went up 60 cents from 2009 to 2010. That story in itself would be pretty dramatic seeing that a $1.10 decrease would be a 33 percent reduction in fuel price from '08 to '09 and a 60-cent increase would be a 21 percent increase in fuel prices.
The story that takes place in the middle is crazy with fleet fuel cost. How about nationally peaking diesel fuel cost at $4.771 in July 2008. What about the low diesel fuel cost of $2.023 in March 2009. No, we didn't forget about gas that still powers most of our cars. Gas prices topped nationally at $4.099 in July 2008. They hit rock bottom of December 2008 at $1.642.
Yes, I can see the bulb in your head coming on and saying, 'I remember price swings but $4.099 to $1.642, a change of $2.457 a gallon in less than five months, wow.' Were you and your company carefully watching your fleet fueling cost at that time? I know you were worrying, saying, 'what are we going to do?' But were you managing your fleet fuel costs?
Here we are one month into 2010. Are you going sit around wait until things go crazy? Remember, most of us didn't think 2009 was crazy for diesel fuel prices but you did watch them go from $2.09 to $2.88 during the year. This is almost 80 cents a gallon or a 28 percent increase in your fleet fuel costs. Remember that most fuel forecasters are predicting $95 crude oil prices in 2010. That would be over $15 a barrel more than where we were for most of 2009. The economy is going to turn around here, and there are 1.6 billion people in China wanting fuel.
Don't forget-plan your fuel management now while you remember.
Glen Sokolis is president of Sokolis Group, a nationwide fuel management and fuel consulting company, www.FuelManagementSokolisGroup.com. You can reach him at email@example.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
* "Looking Back: 2009 Fuel Management in Review", 12-23-2009
* "Oil's Ups and Downs", 1-8-2010
* "Why Oil Does What It Does When It Comes to Prices", 1-15-2010
* "Controlling Fuel Efficiency When Fuel Prices Are Unpredictable", 1-22-2010
* "The Motivation Behind Mobile Fleet Fueling", 1-29-2010