The world of diesel fuel surcharges entered Thursday using a price that is now more than 10 days old and the updated number isn’t coming out this week at all.
Chris Higginbotham, a spokesman for the Energy Information Administration (EIA), told FreightWaves on Thursday that the agency has experienced a “pretty serious hardware issue” and that no petroleum-related data is expected to be released this week.
However, Higginbotham also said the agency did collect the normal survey data Monday and the information remains in its possession. The EIA will therefore be able to produce a weekly average retail price effective June 20, the day the survey was taken.
He added that even though the weekly average retail diesel price was to be released Tuesday, rather than Monday as a result of the Juneteenth holiday, the price was to be based on data collected by the EIA on Monday. Higginbotham pointed out this is normal EIA procedure for Monday holidays.
As for whether or not the agency will be able to conduct next week’s survey in a timely manner, Higginbotham said that was uncertain at this time.
The weekly average retail diesel price published each week by the EIA, an arm of the Department of Energy, serves as the basis for most fuel surcharges.
As those who monitor that number closely for the purpose of setting fuel surcharges waited late Tuesday afternoon, the hours came and went with no decision. The agency then revealed the reason: technical problems.
“Several U.S. Energy Information Administration product releases scheduled for the week of June 20, 2022, will be delayed as a result of systems issues,” read a statement released by the EIA. “Our experts are working on a solution to restore the affected systems.”
Confirmation of the June 20 effective date does clear up any concern that a release of the data on, for example, Friday would raise the question of whether fuel surcharges should be adjusted as of Friday or Monday, when the survey was conducted. Higginbotham made it clear that the price, when released, will not carry the date of the release as the effective date but rather will be effective June 20.
The ongoing delay could still raise some problems. As one trucking consultant noted to FreightWaves, requesting anonymity, do carriers delay their billing? And in an industry where cash flow is always a key issue – it is largely the sole reason why the entire factoring industry exists – can carriers afford to delay that billing even further?
The issue is further compounded by the volatility in the market. The fuel surcharge by definition has a lag in it since it only comes out once a week and retail fuel prices are subject to change at any time. A falling market benefits carriers because their trucks on the road are able to take advantage of declines in the retail price during the week while shippers are being billed on the basis of a fuel surcharge that reflects a week-earlier market. A rising market does the opposite.
The most recent DOE/EIA price is $5.718, effective June 13. But since that time, average retail diesel prices, according to data in the DTS.USA data stream in SONAR, have risen from $5.80 per gallon that day to $5.847 on Thursday.
Although that is a significant gap between the EIA price and SONAR price, the EIA’s June 13 price was the first to reflect the agency’s newly implemented methodology. So there is no history on it and how it compares to other benchmark numbers.
While the DTS data shows a relatively stable retail diesel market, wholesale and futures prices have been volatile. The average national wholesale diesel price on June 13, the date of the last release of EIA data, was $4.783 per gallon. But it shot up to $4.923 by Friday before plummeting to $4.722on Monday. On Thursday, it stood at $4.7411.
Meanwhile, the price of ultra-low sulfur diesel on the CME commodity exchange was $4.2834 per gallon on June 13, rose as high as $4.5719 on Friday before dropping as low as $4.3398 on Monday. On Wednesday, it settled at $4.4046.
That volatility is ongoing even as shippers and carriers stare at a benchmark number that is more than a week old with no indication about when an update is coming.