Critical News & Information for Businesses
that Depend on Fuel and Fuel Services
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FUEL ADVICE BLOG
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Groundhog Day
What Will Fuel Prices Do Next?
The world's most famous groundhog saw his shadow Monday morning, predicting this, already long winter, will last for six more weeks. I am not really sure what that means because, according to my calendar, spring doesn't arrive until March 20th. He is actually predicting that spring will come sooner.
It makes some ask the question, "What will the oil market bring over the next 6 weeks?" OPEC meets on March 15th, which, coincidentally, is 6 weeks from now. If a Sheik sees his shadow will we have 6 more weeks of lower fuel costs? The price of crude appears to have found a comfortable range, trading between $35-$45 a barrel. What does that mean to everyone who drives a car or operates a fleet? A 42 gallon barrel of crude actually produces 44.5 gallons of product, containing approximately:
22 gallons of gas
12 gallons of diesel fuel or heating oil
5 gallons of jet fuel-kerosene
3 gallons of heavy oil
The rest made up of lubricants, asphalt, etc.
This can be tweaked by a couple of gallons here or there. As summer starts to approach, forget what Punxsutawney Phil says, the refiners need to start producing more gas for the "summer-time driving season". Fuel prices tend to go up as the demand for gas climbs in the summer but with less driving going on most people feel the price will go even lower. Indicators point to OPEC making additional supply cuts in March. If you have a solid fuel management program built for lower fuel prices, fuel rebates, fuel discounts and fuel audits none of this should change your plan. Several economists feel that with the world economy in a continued downturn pressure will be put on fuel prices to go lower. It appears that the first half of the year will continue to remain at the current fuel rates and possibly go down a bit lower. For the second half of this year, fuel prices should increase but its difficult to tell at this point based on the economic condition of the country. Your best plans are check out our Fuel Advise Blog at www.sokolisgroup1.blogspot.com. Everyone in the country cares about their fuel prices and fuel management programs, but do people, living anywhere but the Northeast, really care if a groundhog sees his shadow? | |
| Greetings!
The world is a scary place right now. Our country has gone though other difficult situations before and I know we will make it though this one as well. My belief in the country's success is teamwork. Throw out your political hat for a while and remember that without teamwork no team is successful over the long term. Set egos and personal agendas aside and recall what has made this country great; pride, freedom, trust and spirit. We all still have it, whether it is close to the surface or deep within us, but if you want the Dow to be back at 14,000 or more, have less war and more jobs, you have to believe. You have to believe in teamwork.
Regards,
Glen Sokolis
President
If you have an idea or topic you would like to see discussed here or if you would like to contribute an article for future issues, please e-mail me at gsokolis@sokolisgroup.com
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Sokolis
Solutions
Control Your Fuel Variables
2. Price Insurance (hedge)
3. Review all pricing and terms
4. Monitor MPG
5. Idle Policy
6. Fuel Card program - with solid controls
7. Benchmarking fuel costs
8. Educate your drivers on fuel costs
9. Fuel cost impact on your bottom line
10. Audit
11. Fuel Management
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DOE Prices
as of Feb. 1, 2009
CenAtl = $2.484
LwrAtl = $2.233
Midwst = $2.201
GulfCst = $2.189
RkyMt = $2.229
WCst = $2.303
CA = $2.288 |
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Sokolis Strategic Alliances
Here is a selection of companies with whom we share a strategic relationship. These companies do not pay to be promoted by us, however, we feel strongly that they can help your company.
Carbon Fund 
Smartway 
Darry Stuart
 Fleet Management Services
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NOT A SOKOLIS GROUP CLIENT?
Contact us online or call 267-482-6155
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Your company can help lead the country in Environmental Stewardship with these 3 Golden Rules.
-Recycle
-Reuse
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Please visit our blog.
Click here |
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Testimonial
"The Sokolis Group is a highly motivated, dedicated set of professionals who deliver quantifiable hard dollar savings to their clients, improving processes and providing meaningful data. Glen and his team leverage their extraordinary knowledge of the fuel industry to deliver value to every client, every day. Any organization that purchases fuel should, at a minimum, talk to the Sokolis Group about how they can save money. The truth is that the Sokolis Group staff has answers to questions that most organizations don't even know they should be asking."
Christopher Gavigan
Managing Director
Charon Planning
Click here for more information |
To Hedge, Or Not To Hedge?
That Is The Question.
What is hedging? It's a financial instrument to buy something in the future at a given price. In this case, we are talking about fuel cost. Why would you want to purchase fuel today for the future? As this article is written, fuel prices are near a five year low. Could they get lower? Sure. Could fuel prices get higher? Bet on it. I am sure that you have heard the stories of how Southwest Airlines has done a terrific job with their fuel hedging program. They have a good fuel management program. It is a large part of what makes them profitable year in an year out. They take a large variable (fuel cost) off of the table when they manage their fuel cost by hedging. You still want to buy and manage your fuel program the best you can and hopefully with the Sokolis Group (click here for more information), but here is what a hedge might look like.
Your company budgets $3.75 a gallon for fuel. You don't know, like any of the rest of us, if the price will go up or down over the next 12 months. You are able to buy a hedge (financial instrument) at $2.90 for the whole year. This means you will not pay more than $2.90 per gallon. There are several different tools that can be used to work around this, but basically your buying an insurance policy to protect your company from an accident. The accident being the price of fuel skyrocketing back the $4.75 a gallon. That would blow your budget out of the water.
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Down Economy
5 Ways To Get Up
1. Network like crazy - Make everyone in your company a salesperson. New business brings in additional revenue.
2. Go for the money- There are businesses that have slowed down a little but are still doing well. Find them, see if they can become your clients.
3. Market- A slow economy is not the time to go bury yourself or your company in a hole. If there is on area you want to keep pushing it's marketing.
4. Stay close to clients- Reach out to your clients, now more than ever before. It's difficult for them too. Try to bring some value-added services to them for free.
5. Be positive- Positive people bring positive experiences. Who would you want to be around? Eyore or Tigger???? |
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" A 5% reduction in transportation cost has the same P&L impact as a 30% increase in sales."
- Gartner Group | |
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Sokolis Group Viewpoint
We save most companies 10-15% on their fuel cost. Have us work for you and your bottom line will get bigger.
Click here to learn more | |
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Quote
"All our dreams can come true, if we have the courage to pursue them"
Walt Disney |
Are You Green?
Why Not?
The importance of recycling can not be understated. Let me give you an example of the environmental benefits of glass recycling. Glass has no limits to the number of times it can be recycled. A 10% increase in recycled glass use reduces fossil fuel emissions by 7%. Now that's reducing your carbon footprint.
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 Country,Community,
Charity
There are several charities that the Sokolis Group contributes time and monetary donations towards. This is not about fuel costs, but caring.
One such charity that I have become more involved with after hearing their story is Philabundance. They help feed over 900,000 people in the 10 county area that make up Philadelphia. You don't need to live in this area to care or to help. They need your help more today than ever before with high unemployment, people need food to eat. They are a non-profit organization and they really do a great job.
Here is how you can help.
Money - they can buy food in bulk cheaper than food donations but they will take whatever you have.
Please make checks payable to:
Philabundance
c/o Sokolis Group
1432 Easton Road
Building 2F
Warrington, PA 18976
We will make sure the money gets to the appropriate people.
Food- if you work for a food company, they accept large donations of food.
Delivery - You could donate a tractor trailer and a driver when a donor has a large amount of food but no way to transport it to the Philabundance location.
Trucks - they currently lease 7 trucks, that is down from 8 as recent budget cuts forced them to cut back. Fewer trucks mean fewer deliveries to food banks, shelters, churches and rescue missions. Higher truck leasing costs also means less money for food. They will accept donations of refrigerated trucks, free or reduced lease services and donated cars to help transport volunteer staff to the warehouse.
Navigation Systems - this would enable the 7 trucks to locate new locations for food pick-up more efficiently.
Time - if you're good at raising money, want to encourage team building through company-wide food collections or can sort foods at the warehouse they can use your help.
Ask yourself if anyone deserves to go to bed, to work or to school without food. What would you want someone to do for you if you or your family were hungry? | |
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