As a fuel and lubricant supplier, we are well aware of the rollercoaster that fuel prices ride, but it’s gotten especially intense over the course of the last few years. The COVID-19 pandemic upended the industry in 2020 as shutdowns, restrictions and lockdowns slowed travel and movement to a halt. The economy flatlined as many industries took massive hits, including most fuel companies.

But life goes on, and now two years into the pandemic, we’re slowly adjusting to the new normal of COVID-19. The new normal, of course, is the constant ups and downs of ever-changing circumstances. Overall, the past year was wild for the fuel industry, but it was still mainly a year of recovery. Prices rose to record highs by the end of the year, and demand crept back up as businesses and industries continued to reopen.

2021 Recap
As we face 2022, it’s time to look back at this past year and the trends and developments that shook the fuel industry. Here are a few of the big moments that shaped the past year from GasBuddy’s 2021 Year in Review.

  • Spring 2021: The year started well as prices slowly rose and fuel demand increased. However, in May, a cyberattack on the Colonial Pipeline created shortages. The pipeline, which starts in Houston, affected supply for much of the Southeastern part of the country and left many businesses and consumers unable to find fuel until the situation was resolved.
  • Summer 2021: The price of gasoline rose to over $3 a gallon for the first time since 2014, fueled by increased consumer demand. As vaccines became widely available and restrictions eased, people began to travel more. However, in August, hurricane season struck. Hurricane Ida stranded many people without fuel in Louisiana.
  • Fall 2021: Things began to pick up. Gasoline prices climbed to record highs and signaled a growing recovery for many fuel companies, including our partner Chevron. The company reported a substantial profit after severe losses in early 2020 due to the COVID-19 pandemic.
  • Dec 2021: The most dramatic moment of the year came on Christmas Day when gas prices hit their highest recorded price ever, averaging $3.26 a gallon!

Chevron Recovery
As a Chevron fuel and lubricant supplier, we want to provide our customers with a more in-depth explanation of Chevron’s recovery this past year. First, we must explore the losses of 2020. The effects of COVID-19 severely affected the company, causing losses of more than $5.5 billion. As CEO Mike Wirth says, “2020 was a year like no other.” Recovering from that significant loss was a considerable challenge. But the company held firm during the struggles of 2020 and early 2021. By November of 2021, when the company announced its third-quarter results, it reported a profit of $6 billion. In the same quarter of 2020, the company lost $207 million. That’s a pretty significant improvement!

Where does Chevron go from here?
It remains to be seen how the spread of the Omicron variant will affect fuel demand and prices, even as COVID-19 cases reach record highs. Fuel prices remain high and are expected to stay there. However, producers are reluctant to invest in new drilling projects based on the experiences of the last few years with low investment returns and increasing climate change concerns.

In addition, many companies are facing fines, restrictions, or shareholder unrest. According to Chevron CEO, Mike Wirth, “You’ve got some real new dynamics, whether it’s government policy, efforts to constrain capital into the industry, that make it harder for the industry to access capital markets that in the short term could create some risk for the global economy.” Despite the risks that many oil and gas companies face right now, Chevron is in a good place. As the second-largest western oil company, they have a robust financial portfolio. Chevron slashed capital spending by ⅓ last year and plans to stick to low spending at least through 2025. The company is also planning significant investments into clean energy and energy transition technologies by investing $10 billion in hydrogen, natural gas, and carbon capture projects. The goal of these projects is to reduce the company’s carbon footprint by 20%.

So what can your business expect this year?
As a fuel and lubricant supplier, we know that rising fuel prices will hurt small businesses and our customers. Unfortunately, we cannot control the market, but we can help mitigate the pain of rising fuel costs. We offer initiatives to reduce your fuel costs, like bulk fuel orders and a card lock fuel program. So, even if fuel prices remain high, you can plan your budget to absorb the cost.

The good news about rising fuel prices is that it signals economic recovery, which many businesses are still struggling to achieve after COVID-19. Of course, no one can predict the future, but many analysts predict more substantial economic gains this coming year. So, what do we recommend you do? Follow these three suggestions.

  1. Plan for higher fuel prices this coming year. Give our team a call, and we can talk through your options to lower your fuel costs or enhance monitoring of how much fuel you use.
  2. Continue trusting in Chevron products and supplies. Chevron rode the wave that fuel prices took the last few years and remained strong. Their fuel and lubricant supplies are a testament to the company’s strength. We know that Chevron products will keep your equipment in good working order. Chevron’s continued stability also means that the lubricant and fuels you know work for your business will be around for a long time to come.
  3. Implement preventive maintenance. Regular preventive maintenance is the key to keeping your equipment in good working order. Taking action now could save you from costly repairs in the future.

We know that the last few years haven’t been easy, and we’re here to help. Our team constantly monitors the fuel and lubricant industry to see the upcoming curves and dips of oil prices and production. We hope you will continue to trust us for all your high quality fuel and lubricants!