As we have been saying for weeks hold on to your hats because diesel fuel prices will be going higher. Fleet companies main source of fueling is going higher for fuel companies and everyone. Diesel fuel prices will finish the year at $3.294 a gallon based on the DOE records. We believe diesel fuel prices will start 2011 even higher. Right now your fleet manager and fuel manager should be going to executives and say, we are worried that we under forecasted diesel fuel prices for 2011. I know 2011 didn’t even start yet but when I hear a good friend of mine Joe Petrowski, CEO of Gulf Oil on CNBC the other day saying by sometime in January he believe crude oil will be over $100 a barrel and that there is a 25% chance that crude oil will trade over $150 a barrel by Memorial Day. You better stand up and listen. Joe is very smart and just like he said in the interview, higher gas prices or diesel fuel prices does not serve his company or the country any good.
We recall 2008 when crude oil reached $147 a barrel. DOE national diesel fuel prices $4.76 a gallon and gas prices were way over $4.00 it stunk for fleet companies, consumers, fuel management, fleet managers, fleet management services, fleet fueling and just about anything that had to do with fueling except fuel cards. Fuel card, fleet card, fleet fuel cards, fleet credit card services they cleaned up during that time. Higher diesel fuel prices and gas prices are great for fuel cards because they make their money off of interchange fees on the cost of fueling, therefore the higher fuel companies are charging you the more money they are making. There is risk, clearly higher fueling prices and higher prices for diesel fuel additives mean more of a chance of a company paying slow or going out of business.
There is no real fuel savings as part of your fleet management when prices get that high. Sure with fuel management system and fleet management solutions you can cut some fueling costs but if your fueling budget was $3.25 and diesel fuel prices are $4.75 as a fleet manager you have clearly missed your mark. This is not a panic and run article, this is a wake up and listen to someone that knows about fuel management and might be able to help your fleet management programs. Yes, we are talking about mobile fueling, fleet cards, fleet fueling, fleet card services, fuel cards but we are also talking about market fundamentals.
Market fundamentals like why every major commodity has grown leaps and bounds this year but not crude oil. China has 1.4 billion people consuming more fuel each day. The U.S. demand for gas is flat but diesel fuel usage is growing. Now is the time to review not March when it could start to be too late to have a solid fuel management program in place.
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