Ever since the tax increase here in California on the fuel we buy at the pump, a steady increase has been seen, bringing with it a heavy burden for those of us pumping in hundreds of gallons on a regular basis. As I was driving by the sign outside my local truck stop today, I could have sworn my heart skipped a beat as I literally had to look twice to make sure I was reading the price for fuel right at a credit price of $4.00 a gallon! Although we have much higher fuel prices here in this state than nearly every other part of the country, steady increases have been felt across the board as diesel keeps climbing its way sky high.
From EIA.gov on 4/26/18
I was interested to see just where we were from a historical point of view this time last year, so I went to the EIA.gov site to do a quick search. It turns out that the past year has brought with it steep increases in all areas of the country, anywhere from $0.478 per gallon, all the way up to a whopping $0.868 per gallon difference here in California! The entire West Coast in general, including California, has actually seen the steepest regional YTD increase of $0.741 per gallon! With prices like this, it is important to remember to compensate for them in your rates and don’t sell yourself short based on operating off of old fuel prices you were using from previous months to calculate fuel on runs.
Believe it or not, it hurts that I often see owner operators out there under-quoting because they do not take into consideration how drastic fuel price increases have been this past year. This not only makes me sad for them, since there is no faster way to price yourself out of existence than for someone not to know there operating costs, but it also upsets me because it hurts the market as a whole. So long as there are uneducated people undercutting rates because they are ignorant to their fuel costs, those low rates will continue to be the undisturbed status quo. I understand there is always someone out there that is willing to do it cheaper, not necessarily better, but to do it out of a lack of knowledge can always be prevented.
Take the time to follow fuel prices, even if you just run local/regional and hit the same fuel stops all the time like I do. The moment you begin to ignore those fuel price signs and what they’re doing, they will surely creep up on you and begin to dig into the profit you work so hard to put into your pocket at the end of the day. How much higher will diesel prices go and will they ever go back down? Unfortunately, only time will tell.