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bmich 01-17-2019 10:08 PM

Diesel Fuel Pricing
 
I've been reading a Thread on NAT about diesel fuel prices. Obviuosly fuel prices a signifacantly cheaper on the USA side of the border vs Canada. What I found particularly interesting is that producers could forward price / order / book their fuel prices for an entire season similar as to what is done with fert. I have asked numerous suppliers about booking / prebuying fuel to no avail. Even tried getting a price based on X # of cents over Rack price to try and get some price transparency. This would be similar to pricing grain of a futures price less the basis. No luck. The only way to lock in a price is to have large storage and take physical delivery of the fuel. I'm assuming maybe very large fuel users may be able to get this type of pricing. I'm not sure whats different between the US and Canadian fuel industry. Is it that in Canada there are only a few fuel companies hence no competition and therefore they don't need to offer a mechanism to price / hedge fuel prices. The current system where the retailer makes a deal based on X cents discount of the price is ultimately not transparent and is ripe for all kinds of manipulatuion. Obviously having this is not in the interest of fuel companies. Has anyone had any luck forward pricing / contracting fuel prices in Canada.

shmiffy 01-17-2019 10:16 PM

I was running the numbers and some of them say 60cents cdn/liter. About the best deal I can get I taking deliver now and paying in May from coop. Think Ufa is 2 cents cheaper and don’t pay till November. Crazy that diesel hasn’t hardly dropped here.

Grumpie 01-17-2019 10:16 PM

No

SWMan 01-18-2019 12:21 AM

bmich you have it exactly right, no accountability in the system and doubt there is any real serious competition either. I've been bugging them to do a pre-buy for a long time now but nothing has happened, I hope everyone starts bugging them!

Not sure how much of our higher price is related to taxes, but it's probably some. When I checked a couple days ago it was 78 cents/liter. I've had good luck filling in March and then in summer to avoid the busy seasons, they always seem to increase price in busy season. Feb-March seems to usually be the best time to buy. I have two large tanks and I'm sure they have easily paid for themselves by now in under 10 years. Seems they want the farmer to build the storage but at least there has been some incentive to do so.

82L2 01-18-2019 01:02 AM

My local co-op has a 6 month "price guard" program for gas, diesel and heating oil through UPI Inc. The contract fee is 3.5 cents/liter times # of liters booked. You pay whatever the price at time of delivery is up to a maximum of 4 cents/liter above the booked price. Also have a 12 month contract with a cap of 4.2 cents/L If the price drops, you pay the lower price. This for delivered fuel, there is an additional 4 cent/L if purchased at an FS cardlock anywhere in Ontario. They have offered the booking service for a few years now but it used to be cheaper with the contract costing 2 cents and the cap was 2 cents.

Fena farms 01-18-2019 02:10 AM

I could only wish to buy clear diesel for .75 a litre,
Last month I paid $1.31 a litre

Highmarker 01-18-2019 10:13 AM

UFA used to have pre buy options but they stopped because they were loosing profits and they didn’t need to do it to be competitive. Not enough competition there’s really only a few fuel companies in Alberta that supply all the bulk fuel. I remember dad saying we were like $0.20 under the daily price on diesel because of the good pre buy pricing.

stevie 01-18-2019 12:17 PM

Cost me 3 cents a litre for a capped price of 86.4 for a year of marked, and 100.4 for clear

coolio 01-18-2019 02:09 PM

Price here last week was .81 cents delivered

njungers 01-18-2019 03:29 PM

No option here to lock up or pre buy diesel, I have to order and take delivery immediately and get spot pricing. I can do some delayed pricing if I take over 21,000 gallons, but nothing on smaller quantities in my area.


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