Key Takeaways for Decision Makers
CONTRACTORS: Recognizing fuel cost trends can be key in being able to predict the operating costs for a future job months to years out. Using these trends can aid in generating more accurate bids, as well as help in managing operating costs for not just one machine, but an entire fleet. Lastly, understanding the difference in costs between summer and winter months can help prioritize which jobs to even consider perusing.
Understanding fuel costs is incredibly important in order to run a successful and profitable business. The cost of fuel heavily impacts the operating costs for equipment, and being prepared for cost fluctuations from month to month can help aid in decision making. For example, usage on a piece of equipment that burns higher amounts of fuel per hour might need to be monitored more closely or used less during months where fuel costs are elevated. Understanding monthly trends can also be beneficial for creating a bid for a job that is months or even years away. If the majority of the work for the job is going to be completed during the summer months, operating costs will likely increase. Likewise, jobs during winter months will generally have lower fuel costs. Being able to predict these changes in fuel costs could help edge out any competition and win the bid.
Here’s what we found looking at averages in data from 2004-2014:
Diesel costs generally spike from the months of March to September. On average, the cost of diesel fuel per gallon in March is $2.99, a $0.16 drop from the same analysis we conducted in February 2015. This is also over a 5% increase from the February average. The average diesel cost rises another 3.7% from March to April before it levels out for the summer. Diesel costs will start to decline in October and will continue to decline until they hit their lowest average cost at $2.87 in February. Diesel fuel tends to be the least expensive in January and February where the average costs stays around $2.85, and the most expensive in September right before prices start to decline. Overall, when comparing the 2015 fuel analysis to todays, the trends appear to be almost identical with the only difference being lower diesel costs on average.
When compared to diesel, average gasoline costs have a similar spike from March to September, but a much faster drop in process from October through January. In the lead-up to Spring season, there is more than a 7% increase in gasoline costs from February to March where the average cost is $2.69 (a $0.22 drop from the 2015 analysis). Average gasoline prices see another 6% increase from March to April before leveling out for the summer months. In October average gasoline prices drop by 6% with further drops in average prices continuing through January when gasoline prices are at their lowest ($2.49 on average). Gasoline tends to be least expensive in January while it reaches a peak of $2.92 in September just before prices begin to fall. Overall, while todays average gasoline prices have decreased since the 2015 analysis, the monthly trends have remained relatively consistent.