They say fuel prices shoot up like a rocket and fall like a feather. We’ve seen yet another example of that this week as the benchmark diesel price used for fuel surcharges has eclipsed $4 per gallon. This is about a 20-cent increase from the prior mark of $3.89. While several factors can impact this figure, there are a few more notable than others.
Retail prices are determined by movement in the futures and wholesale markets. As of late, we’ve seen a lot of volatility in those markets. In the futures market, ULSD on the CME commodity exchange climbed 30.42 cents between a $2.66 settlement on Feb. 2 and last Friday’s settlement of $2.9642 a gallon. ULSD on Monday reversed that slide, which had run five consecutive trading days, and fell 4.46 cents, to $2.9196 a gallon.
It was in some of the localized markets, however, where the craziest action was taking place. In spot physical markets, trading for diesel is done for diesel transported on either a pipeline or on a waterborne carrier like a barge or cargo. Trading is conducted as a differential to the CME price, and volatility in the past two or three weeks has been extreme, according to data provided by DTN.
With such action taking place, retailers are taking a proactive approach and raising pump prices at a rapid rate. The core demographic dealing with this price hike are trucking companies who’s top-3 expenses consist of payroll, insurance, and fuel costs. Some fuel programs might suffer based on such market changes, so now is a better time than ever to explore programs which deliver better security and transparency with pricing and reporting capabilities.
The Guttman Energy Fleet Solutions department works with companies of all shapes and sizes to deliver a premier fueling program that delivers on all fronts. Check out https://www.guttmanenergy.com/fleet-fuel-card/ for more information.
Source:
https://www.freightwaves.com/news/benchmark-diesel-price-jumps-the-most-since-october-back-above-4
