I feel strongly that client communication is essential, especially when there are major global issues impacting the fuel industry. We're all reading the headlines and the news can be scary. In fact, I believe that the main driver of increasing fuel costs is not supply and demand, but fear and uncertainty.

If your company has hedged fuel in the past, continue to stay with the program. If your company feels now might be a good time to start and fear is your biggest motivator, then I will caution you on this action.

With diesel fuel prices having increased 60 cents since the 1st of the year, you have every reason to be nervous and worried – that’s totally understandable. However, let me remind everyone about we’ve had run ups like this before.

A LOOK BACK

On January 1, 2008, diesel fuel prices were $3.376; not much different than what they were on January 1st of this year. Two and a half months later they were $3.974.  Again, not that much different than where we find ourselves today. 2008 truly was built up by a supply and demand issue; China was using huge amounts of fuel building the infrastructure for the Olympic Games; our economy had not yet soured; and the European economy was still in growth mode. From that point on, speculation took control of the market with people betting the price would reach $5 a gallon (or more) and stay there. On July 14, 2008 the price of diesel peaked at $4.764 a gallon.  As global economies began to slip and the Olympics wrapped up, the price of oil dropped like a rock. By September 15, 2008 prices were back down to $4.023 a gallon; on October 28, 2008 they were at $3.288 a gallon; and by the end of the year it was all the way down to $2.327 a gallon. Who saw that coming?

Look back to another fear factor incident we had in 2005 after the hurricanes battered the Panhandle. Prices spiked short term but quickly corrected themselves once the market realized the fundamentals of supply and demand were fine.

Supply and demand today is also fine. Fear is high. No one knows what tomorrow brings.

• Tsunami hits Japan, the 3rd largest user of fuel - prices go down
• Egypt
• Libya
• Saudi Arabia
• How will $3.50/gallon gas affect U.S. drivers' habits and usage?
• OPEC covering shortfall, with more room to add
• Speculators holding 25% more of the crude oil contracts than normal as the price of crude increased 18%. It's a high risk, high reward game.

Yes, it's easy to be concerned about the price of fuel, but don’t let fear get the best of you. Now isn’t the time to jerk the wheel and sail off in a different direction. One thing’s for certain, you're going to have a long road to go.  As the price of fuel increases so do fuel thefts by employees.  Also watch for vendors increasing their margins under the assumption that you won't notice because, after all, what’s a few more cents added to an already high number? When the price of diesel fuel falls, and it will, that’s when fuel vendors make a killing off companies that aren’t watching their fuel program closely enough. Make sure that doesn’t happen at your company?