WM · Earnings call · 2026Q3T · Full report

Diesel Price and Fuel Surcharges

WASTE MANAGEMENT INC · 2026-10-27 · Importance 46 · Surprise 56

For Q4, management assumed diesel prices would be about 40% higher than in Q4 of 2025, at a little over $5.50 per gallon. It said increased fuel costs are also appearing in third-party costs and that its fuel surcharge program is designed to recover both those costs and direct fuel expense. Management noted an approximately one-month average lag in fuel surcharge recovery after diesel price movements, including an 80-cent-per-gallon increase from August to September.

Key facts

• Waste Management said it was assuming Q4 diesel prices about 40% above Q4 of the prior year, at a little over $5.50 per gallon.
• WM expected a 40-basis-point year-over-year margin impact from fuel in 2026.
• WM cited diesel at $6.37 per gallon and said it was recovering the resulting cost broadly across its portfolio in the short term.
• Waste Management said inflation was appearing in third-party costs and its fuel-surcharge program was designed to recover those costs, not only direct fuel costs.
• Waste Management said its fuel surcharge recovery typically lagged diesel price changes by approximately one month; diesel rose 80 cents per gallon from August to September.
• Higher fuel costs were a 70-basis-point headwind to WM in the third quarter of 2026.
• Higher fuel costs reduced WM's margin by 40 basis points in the third quarter of 2026.
• WM's energy surcharge program was recovering higher direct and indirect fuel costs in both solid waste and health care during the third quarter of 2026.