For more information, give Sokolis Group a call (267-482-6155) and let us help set up a fuel management program that fits your needs. Or visit us at www.SokolisGroup.com.

For those of you who don’t know, Sokolis group a fuel management company is located in Warrington, Pennsylvania.  It’s about 45 minutes with no traffic (rare in the congested northeast) north of Philadelphia.  About another 45 minutes north from Warrington is the Lehigh Valley airport.  Obviously we have our choice of flying out of either being in-between both.  Money is the deciding factor and in this case it was $500 cheaper to fly out of Lehigh valley.  Little did we know that we’d be visiting both in the same day!  Because of delays we were bussed all the way from Lehigh Valley to Philadelphia. Otherwise we would’ve missed our connecting flight in Charlotte.

How is it $500 cheaper to fly south to Charlotte and then back to Cincinnati?  Would it make sense for you to say to your customers if we ship directly to you in Sacramento its $5,000, but if we have to ship to Los Angeles and then Sacramento its only $3000?  I did some research to understand this and the simplest answer I found was something we all learned in economics; supply vs. demand.  I think here lays the big difference in comparison to the trucking industry.  In trucking industry there is the opportunity for dedicated routes, especially those for-hire carriers.  In the airline industry they don’t have the benefit of that.  Of course there are popular destinations that get more consistent travelers, but apparently Philadelphia to Cincinnati isn’t a big seller.  It’s easier to send a smaller plane to Charlotte and then let the people not going to Charlotte connect to their flights there.  Smaller, fuller planes are more efficient than larger half-filled planes with no stops.

Of course we survived the trip and issues of traveling that always seem to occur.  While we’re attending the NPTC over the next few years, I can guarantee if the flight is $500 cheaper we’ll be going that route.  Maybe next year I’ll have another story.  The fueling cost to fly these planes must be incredible.  Hopefully, with crude oil prices going down jet fuel prices will go down as well giving the airlines some fuel savings they can pass on to customers.

Unger, Carl. “Why Are Nonstops More Expensive than Connecting Flights?” SmarterTravel.com. December 15, 2009. Retrieved May 5, 2012 from http://www.smartertravel.com/blogs/today-in-travel/why-are-nonstops-more-expensive-than-connecting-flights.html?id=3973678

For more information on how Sokolis Group can help you set up a fuel management program to save on your fuel purchases, call us at 267-482-6155. Or reach out to us at www.SokolisGroup.com.

The bottom on fuel prices are going to fall.  Your fueling budget with look better soon.  You will have fuel savings compared with today.  Here is why:

1. For every dollar crude oil price go up or down diesel fuel prices and gas prices go up or down equally by 2 or 3 cents per gallon.
2. We are down $10 a barrel for curde oil prices.  This woud translate into a 20-30 cent per gallon drop in diesel fuel prices off of highs 2 months ago.  Diesel fuel pries are down only 10 cents a gallon from their highs.
3. With gas prices they are trying to be held up with the summer driving season but gas prices have also only gone down about 10-15 cents per gallon.
4. World wide demand is down for fleet fueling with Europe still trying to sort its word out and China demand down below expectations.

Retail margins across the country are up at truck stops like Loves Truck Stops, Travel Centers of America and Pilot Flying J locations.  This is the way the truck stop business works, ride the highs and try to make something on the lows. C stores, cardlock locations all do the same thing.

Who blinks first? Well what goes up most go down.  What diesel fuel prices go down.  How far will diesel fuel go down, 15 cents in the next month unless something happens in Iran.

Gas prices will fall at least 10 cents a gallon.  Hey, fuel savings to you from today’s prices.  If your a fuel manager aren’t you happy? Your fueling budget is starting to look closer to what your fueling budget was when you did fuel budgeting 5 months ago. To us it looks like 25 cents fall a gallon by the end of the summer.  Crazy.  Sure! Does everyone have to step out on a ledge.

Take a review of your fuel management program.  The question is are you ready as a fuel manager or CFO for fueling prices to fall quickly. Your saying, yes we want lower fleet fueling prices what is it to be ready? Well now is the time to make sure you know what your fleet fueling margins are. As fleet fueling prices go down you want to make sure that the fuel margin that you are being charge go down just as quick.

If your fuel management solutions are in the shape you think they are in, this is already happening.  If they are not in good shape, your company is tossing money away.  No throwing money away.  It might be pouring money away.  Who has the fuel auditing at your company? The fueling negotiations, the fuel card information and to determine your fuel baseline saving.

Need help? Got fuel? You probably need help. Have you heard of Sokolis Group?

Being there made me ask myself the question, what makes displaying at a conference a success. Yes, we all want tons of leads from fleet operations of all sizes but beyond that, how can we measure success.

At the NPTC show we didn’t get tons of fleet leads looking for us to do fuel management for them. We did get some real quality private fleet leads.  We saw a few of our fuel management clients and had some good time to talk with them and catch up.  We talked to several private fleets that right now, we weren’t a fit for them. Though we built a foundation for a relationship in the future.

Many trucking people wanted to talk diesel fuel prices with us. They weren’t looking for us to be their fuel manager or anything like that; they just wanted our view as fuel experts. No sale today but what happens if those people changes jobs, they might remember us and give us a call. We just had that happen from a fleet manager who was at a company 6 years ago. He has been with this new company for 2 years and they were having fueling issues. He reached out to me and wanted a reminder of what we do and I explained to him.

He was very excited about saving money on fuel costs and having someone strategically source is diesel fuel.  After calling a few of our references and flying out to meet him and other company executives, we signed the account and let the fuel savings begin.

So you just don’t know what a conference or a relationship can lead towards. When quality people are around quality people good things seem to happen. It might not be today. But if you do the right thing. Things will happen.

Overall, I give it thumbs up. We will probably be back next year to Cincinnati and the National Private Truck Council as long as the dates fit our schedule. Safe driving and good fuel savings.

This means diesel fuel and gas will flow through this refinery.  Delta bought it to have jet fuel flow through the terminal. They believe they are buying a billion dollars worth of equipment for $150 million.

With the ability to produce their own jet fuel, they feel this will be a competitive for them in the marketplace because they can hedge their #1 expense jet fuel better. Providing Delta with a fuel saving could save them over $300 million dollars a year in fueling expense.

Clearly, Delta feels their fuel management programs can run and integrate this into their network. This move if successful could lead into other airlines buying refineries to achieve lower cost fuel and fuel saving for their highest expense jet fuel.

In other Northeast refinery news Sunoco has been sold to Energy Transfer Partners for $5.3 billion dollars. This might set up a move for Carlyle Group to have a joint venture on running the 330,000 barrel a day refinery in Philadelphia. Carlyle Group is a private equity group that would run the refinery if the deals happens.

Clearly, this is all positive news for fleet fuels and jet fuel for the Northeast that just a very short time ago, looked bleak.  Always remember that when things look better in the diesel fuel market they are probably going to make a turn in the other direction.  Don’t take your eye off of trying to achieve fuel saving.  Fuel management is the way to go today.

The market for oil is a global market more today than ever and will continue to be that way. Diesel fuel prices and gas prices are largely determined by global crude oil prices. These oil prices are affected by many different things in the world like: economic sanctions on Iran; deep-water drilling off Brazil; spare oil capacity in Saudi Arabia; auto use in China; less nuclear power in Japan

What happens in the Strait of Hormuz will likely have more impact on prices at truck stops and other retail outlets. Even though the U.S. doesn’t import a single gallon fuel from Iran it does matter. We have more oil rigs drilling in North Dakota producing twice as much fuel as they were just a couple of years ago. We live in a world economy for oil, diesel fuel and gas at that world now sets the tone on how much oil prices are going to cost.

There are dozens of factors that go into what happens with oil prices.

Here are the top five factors today.

1. Iran the geopolitical turmoil has the oil market very worried. Even though the U.S. might not buy and oil from Iran other countries do. If they can’t buy from Iran, then they go to other countries they can buy oil, some of which might be the same as the U.S. Hopefully, Iran comes to its sense as I suspect it will in the next couple of months and this will ease.
2. Rising worldwide demand. It’s hard to believe that in the U.S. we use less oil today than we have in over 10 years. Our population growth changes at a very slow rate and for the past 10 years if you wanted a car you had a car. It’s not that way in some of these other countries like China, India, Brazil and even Saudi Arabia. There population is growing as well as being moving into a class where they can buy cars. In our country the only product we are using more of now is diesel fuel, which happens to be the world oil for cars since most cars outside the U.S. run on diesel fuel.
3. Speculation on oil prices. You have people bidding against each other and driving the price higher. Since the crude oil market and heating oil market move up and down so much throughout the day. You have buyers will to take a chance they can buy now and in a few hours or a day make back their money and a nice profit. The more uncertainty in the world the more speculation happens.
4. As demand for oil products has increased worldwide, spare capacity has become more limited. Right now estimates are there is less than 4 million barrels a day in spare capacity. Saudi Arabia has about 2 million of those 4 million barrels but has been producing slightly more to handle the loss of Iran fuel in the market.
5. U.S. infrastructure for refining product and shipping product on the pipelines. It has looked like for a while that 3 refineries would be closed in the Philadelphia area. The picture now is looking brighter with strong potential buyers. Our countries pipeline system is vast but old and there is capacity issues at times on these pipelines that cause diesel fuel market spikes or gas spikes in on area but a few hundred miles away, there aren’t any fuel pricing issues.

I believe that it’s fair to say that oil prices will continue to lead story lines one way or another for a long time. Just as they have in the past. Credit for some of the information in the story, goes to Wendy Koch, USA Today.

For more information on how Sokolis Group can help you set up a fuel management program please call 267-482-6155.

Gasoline analyst Trilby Lundberg fells that the peak gas prices might have already been reported a couple of weeks ago. “Crude oil prices have slipped and if they don’t rebound in the near future, gas prices will peak soon, if they haven’t already,” she told Bloomberg.

Prices at diesel fuel pumps and gas pumps have either stayed the same over the past few weeks or have started to come back down which is great for all.  We believe that we will continue to see prices fall over the next several weeks.  At this point history would say, unless crude oil starts to take off again or we have refinery issues or a war with Iran, we should see prices go back to the high $90 a barrel range.