Matt Troy
I was just more talking about the switching sensitivities of the various sourcing basins but I got it. Okay, thank you.
Operator
Thank you. Our next question is from Cleo Zagrean with Macquarie Capital.
David Baggs
Good morning, Cleo.
Cleo Zagrean, Macquarie Capital
Good morning and thank you and Happy New Year. My first question is also with regards to the domestic coal business. Can you help us think just more specifically around the sensitivity of EPS for ’15 to plus or minus 5% or whichever way you think is good for a ban in domestic coal volume around that base case of flat for this year, what would plus or minus 5% domestic coal to EPS for 15 given the profitability in the new profit set up, the new mix, and also given the fixed variable structure that we’ve seen affect earnings so far? Thank you.
Fredrik Eliasson
Hi. This is Fredrik. I think in terms of fixed variable that is less of an issue. In terms of sensitivity, clearly are sensitivities it if coal comes down and is not flat it’s going to be sensitivities to our EPS guidance. But at the same time, as we said, there are opportunities to offset that so there’s a lot of different pieces that goes into our guidance so I think there’s a little bit isolating specific pieces. When we add all of the things up as earlier and think about the business as a whole and some of the vibrancy we’re seeing in certain markets and some of the productivity opportunities, the pricing, we feel that we can absorb some of those sensitivities on the coal side, but we’ll have to wait and see and get a couple of quarters on the belt until we get full visibility into what is doable and what’s not doable for the year.
Cleo Zagrean
Thank you. And my second question is with regards to operating ratio excluding fuel. You’ve highlighted deservedly that you live a pass through so I would appreciate any help you can give us to think about the performance of the business ex the noise in the revenue and expense line. Are you looking at a path for OR X Fuel, any kind of progression that you have in mind that you can share with us so we can track performance on that basis? Thank you.
Fredrik Eliasson
Well the positive lag in the quarter itself here for the fourth quarter was about $23 million and I think $15 million year-over-year, so that was a favorable coming from fuel. We also you saw a little bit of favorability because wholesale prices, I think, came down faster than the retail prices and it’s the retail price that our fuel surcharge is tied to so what we pay to the pump probably declined faster than the fuel surcharge revenue itself, so that’s another benefit that we saw here this quarter. But overall, frankly if you look at a margin expansion and our operating ratio, it is not a profit element, if fuel prices come down, it’s actually generally slightly positive to our path for 65% operating ratio longer term. But as I said overall, not a profit element. There is some lag effects and here we saw an additional lag perhaps in the fourth quarter or the fact that wholesale prices went down faster than retail prices and that…
Cleo Zagrean
So when so — I’m sorry, so in a lower fuel price should we expect that you are finding it easier to reach that mid-60’s target sooner?
Fredrik Eliasson
Yes, it’s immaterial in the scheme of things but if you just think about the fact you’re adding for example, $100 million to the revenue line and adding $100 million to the expense line, since it is not a profit driver, the operating ratio of that is 100% because you’re not getting a margin on that, so as fuel price comes down and your fuel expense goes down, and of course volume you actually get a little benefit from it.
Cleo Zagrean
Thank you very much.
