H McKee Stewart Jr

Musings on Business, Finance, and Economcs.

Diesel Fuel Price Update

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Notice anything ominous about this? In the trucking world, higher diesel means higher fuel surcharges, leading to higher margins. Unfortunately, this has to be balanced against the fact that higher energy costs lead to higher production costs, with the attendant margin squeeze on the producer (assuming the producer’s can’t increase prices enough to keep up). Leading to less production and less freight on the trucks, and yet more problems for the truckers, who are typically operating on small margins. 

 

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Let’s see, 26.2% increase 2010 to 2011; 10.8% increase from 2011 to 2012. Those are some serious increases. If seasonal patterns hold, we could be looking at diesel prices around $4.40 – 4.50 in April and May.

Source: http://www.eia.gov/petroleum/gasdiesel/

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Written by hmstewartjr

26 February 2012 at 7:45 PM

Posted in Uncategorized

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