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March 28, 2016 4:00 PM, EDT

Diesel Rises Two-Tenths of a Cent to $2.121

Todd Lappin/Flickr

The U.S. average retail diesel price inched up less than half a cent for its sixth consecutive weekly gain.

Diesel increased by two-tenths of a cent per gallon to $2.121 the Department of Energy said after its March 28 survey.

Despite the six-week string of increases — worth a combined 14.1 cents — diesel is 70.3 cents cheaper than a year ago, when the price was $2.824, DOE's Energy Information Administration said.

Diesel fell slightly in two regions, 1.3 cents to $2.077 in the Midwest and by two-tenths of a cent to $2.177 in the West Coast less California area.

EIA also said the average price of regular gasoline climbed 5.9 cents a gallon to $2. 066, but it is still 38.2 cents cheaper than a year ago.

Gasoline prices rose in all regions of the country but remained below $2 in four areas.

The Gulf Coast had the lowest average price, $1.863, up 5.8 cents.

The Rocky Mountain region price was $1.947 up 4.5 cents. In the Midwest, it was $1.957, up 1.8 cents. In the Lower Atlantic area it was $1.995, up 6.5 cents.

At V3 Transportation, an expedited carrier, fuel is less of a concern than it is to many in the trucking industry, “Still, fuel is obviously a component of our costing model,” CEO Robert Poulos told Transport Topics.

“We are a little bit insulated because of how we operate,” he said. “We don’t profit off of fuel. It’s mostly a direct pass through to the asset.”

The company has 120 vehicles driven by owner-operators who are leased to the company.

V3 vehicles, which include cargo and Sprinter vans and Classes 6-8 straight trucks, use 28,000 gallons of diesel and 12,000 of gasoline every week, he said.

Yet when it comes to purchasing power, Poulos said the company operates at a competitive disadvantage for “not being a big guy” so it participates in fuel discount programs and is looking at a few more now.

“My fleet manager just negotiated a discount through [payment technology provider] Comdata. We now participate in its Tier 1 program, which is [a savings of] 30 cents to 50 cents per gallon. It now allows us to compete with the big guys,” Poulos said.

But from a pure fuel consumption standpoint, he said, “Our average [miles per gallon] based on the equipment we run is significantly different. An average straight truck gets from 9 to 12 mpg as opposed to tractor that is 7 mpg. The economics of our business are a lot different.”

He said that 90% of his business trades in the spot market, so fuel is built in to every price quote it gives. “So fuel recovery is fairly seamless for us. We are affected hardly at all as fuel prices go up.”

“Where we would feel it is in our contract rates, our set rates that have fuel locked in. Again, that is only 10% of our business, so it is manageable,” Poulos said.

Meanwhile, oil has been trading near $39 a barrel in New York “amid speculation that a meeting of crude-producing countries next month won’t ease a global supply glut,” Bloomberg News reported.

“There’s a growing realization that the meeting in Doha is not going to be effective,” Thomas Finlon, director of Energy Analytics Group in Wellington, Florida, told Bloomberg. “The U.S. has lost about 500,000 barrels a day from its peak, but the Iranians are planning to increase output by more than 1 million, so we’re going to see the surplus grow.”