Diesel fuel as one of the major expenses in the trucking industry has to be constantly observed. In the past year, we have seen it gain a downward trend, which was welcomed with joy.
Unfortunately, it seems that this period has come to an end. Let’s see what can we expect and how will this affect the business of the freight market.
Diesel fuel price trends
Diesel fuel started at a $3 price mark at the beginning of the year 2019. Then it dropped to $2.9 and kept its steady pace until late February when it jumped back to $3.
The upward trend slowly progressed through April when diesel fuel reached $3.1 price mark. It stayed that way to June when it started going down again. Just as August came close to an end, the price dropped to $2.9 and was believed to stay there to the end of the year.
However, state-owned Saudi Arabia Aramco oil processing facilities at Abqaiq and Khuraiswa were attacked by The Houthi movement in Yemen using drones.
Both facilities had to be shut down, therefore cutting the oil production in half. The supply dropped significantly, and so the diesel price started to go up.
How will this affect the freight market?
The attack on the oil facilities occurred on the 14th of September, and just a few days later the diesel fuel price started to go up. Starting from 23rd of September diesel fuel went back up to $3 and continues to rise.
How will the situation go from here is not certain, but a lot of experts advise that the price will continue to go up until the situation with the facilities is resolved and they’re back in production.
With the diesel fuel being more expensive, carriers will probably have to adjust the rates to compensate for the upcoming rise of fuel expenses.
Even though the prices for diesel fuel are still lower when compared to October last year when they peaked at $3.4, it’s still possible that prices will go beyond that point before the end of 2019.
It remains to be seen how will carriers adjust their rates and who will be able to hold them at where they are without losing a lot of money.
What can you do to minimize the losses?
There’s not much you as an Owner Operator or carrier owner can do since you can’t impact the fuel price for it to drop. The best you can do without any help is to adjust your rates and to observe the competition.
Don’t cut your rates by in a panic, but carefully observe the market and adjust them just a bit to stay competitive.
That’s ALMOST all you can do about it.
What can possibly save you, and just at the right time as well, is our fuel discount program!
Fuel discount program is created for, but not limited to, situations like these. We can help you save up to around 40 cents per gallon rebate a week! Which comes up to thousands of dollars of savings per year!
Save your money and reduce the impact of the rising fuel prices in a blink of an eye. Contact us to start saving your money today!
