Diesel Average Rises for 5th Week to $2.119

The U.S. average retail diesel price rose for a fifth consecutive week, but the pace of increase slowed.

Diesel increased by 2 cents a gallon to $2.119, the Department of Energy said after its March 21 survey. Trucking’s main fuel had jumped 7.8 cents the previous week.

DOE’s Energy Information Administration also said the average price of regular gasoline climbed 4.6 cents a gallon to $2.007, but it is still 45 cents cheaper than a year ago, the agency said. Gasoline prices rose in all regions of the country.

Despite the five-week string of increases — worth a combined 13.9 cents — diesel is 74.5 cents cheaper than a year ago when the price was $2.864, EIA said.

Joyce Brenny, CEO of Brenny Transportation in St. Cloud, Minnesota, told Transport Topics, “You need to manage [the cost of fuel], keep an eye on it. You need to know what you are expecting out of your fuel surcharge.”

She said the low prices for diesel caused “our gross dollars to change dramatically, but our bottom linelooks better than it ever has. That has been the biggest cost saving we have had. Nothing else has gone down in price.”

Brenny, a veteran of 35 years in trucking, said she also focuses on helping drivers understand their role in managing fuel costs. “We are very against just throwing people in the seat of the truck.”

Her fleet of 50 trucks uses 25,000 gallons of diesel per week.

Brenny tells drivers, especially new ones, there are “some nice bonuses” tied to fuel mileage. But they take training to reach and, depending on the age and experience of the driver, the program can last a year.

“It’s really hands on, and it’s very expensive. But I think we are seeing a return on investment . . . as it is maximizing our fuel mileage along with retention, which is unbelievable,” she said.

Considering the industry, in general, Brenny observed:

“Of course, stability is something that we all desire. I don’t care if it’s in fuel or the price of trucks or whatever you’re looking at, driver turnover. It’s not the trucking industry. We can wish for it, but it really hasn’t been the trucking industry,” she said.

On the crude oil market, the price was on the rise above the $40 threshold for the first time since November.

On March 22, crude oil futures on the New York Mercantile Exchange closed at $41.46, the highest price since Nov. 30, but then closed at $39.79 on March 23.

Alan Briley, president of Fontaine Trailer’s commercial platform business, suggested the oil field business has gotten more efficient, and oil prices may not have to rise as high as once thought to rekindle production that low prices stalled.

“Some customers in that segment said oil in the $55-60 range would be a very positive trigger expanding and creating some additional demand, not just for trailers but for all related products in that industry. It’s trending the right way now,” Briley said.

Fontaine is a unit of Marmon Highway Technologies, a Berkshire Hathaway company.

But global oil exploration and production capital expenditures are expected to fall 17% this year, after a 24% cut in 2015, which would be the first time since 1986 that upstream investment has fallen for two consecutive years, the International Energy Agency wrote in its most recent Medium-Term Oil Market Report.

“It is easy for consumers to be lulled into complacency by ample stocks and low prices today, but they should heed the writing on the wall: The historic investment cuts we are seeing raise the odds of unpleasant oil-security surprises in the not-too-distant-future,” IEA Executive Director Fatih Birol said in a statement.

Around the nation, diesel remained below $2 a gallon in only one region, the Gulf Coast, where it stood at $1.991 after rising 0.1 cent.

California had the peak price, up 2.8 cents to $2.418.

It rose the most in the Rocky Mountain states, up 5.7 cents to $2.056.