Compared to today, diesel prices during the “good ol’ days” were remarkably stable. Only once during the entire 1990s – at least dating back to March 1994 – did the price of diesel rise or fall by more than 5 cents in a week. During the 2010s, we see a change of that magnitude about once a month on average.
2000s: 95 times in 521 weeks (18.2%)
2010s: 42 times in 186 weeks (22.5%)
And consider this: The difference between the lowest and highest prices during the entire 1990s was just 37.6 cents. That is less than the surge in diesel prices during just two weeks in September and October 2005 in the aftermath of Hurricane Katrina and Hurricane Rita.
Given that diesel prices have escalated, it’s understandable that volatility would be greater in terms of cents per gallon. After all, today’s average diesel prices are more than three times the average price in the 1990s: $1.138. So a 1 percent increase or decrease would be about 1.1 cents back then; today, it would be 3.8 cents. But that’s really just a comfort to a mathematician. You live in the world of dollars and cents, so unless your revenue per truck or cash reserves also has more than tripled, diesel price volatility can be a big deal.
