Diesel Average Dips 0.5¢ for First Decline in 10 Weeks

Retail diesel prices dipped 0.5 cent last week to $4.142 a gallon, interrupting a price advance that had raised the price of trucking’s main fuel nearly 30 cents over the previous nine weeks, the Department of Energy reported.

Retail gasoline prices, meanwhile, continued to climb, with the average price per gallon reaching $3.941, an increase of 2.3 cents over the previous week and 64 cents since Jan. 2, DOE said after its April 2 survey of fueling stations.

A year ago, diesel was selling for $3.976 on average and gasoline was $3.684, the DOE said.

The week of April 2, diesel prices were “following crude down” as several factors affected oil markets, said Sander Cohan, a transportation fuel analyst at Energy Security Analysis Inc. in Wakefield, Mass.

“Most importantly is the bad economic news coming out of Europe, concerns about Spanish debt, for example,” said Cohan.

“The second issue is, the other day, the Fed came out and said they were reluctant to continue quantitative easing” to continue boosting the U.S. economic recovery, he said.

Crude fell as low as $101.47 a barrel on the New York Mercantile Exchange early last week, the lowest price in seven weeks, following news that inventories expanded. On April 5, however, the price of crude oil rose again, closing at $103.31 a barrel on the Nymex.

On top of bad economic news from Europe, U.S. crude oil inventories have risen 2.55%, the biggest surge since 2008, DOE said in its latest inventory report. Higher inventories also helped stop diesel’s price advance, Cohan said.

The same report showed U.S. domestic crude output had reached its highest level in 12 years, DOE said.

Diesel’s drop in price, however slight, was welcome news to truckers, who said they can do nothing about prices.

“What can you do?” said Victor Domenico, who with his wife, Monica, founded Domenico Transportation Co. in Denver 11 years ago.

“It’s the one thing you can’t manage,” Domenico said. “We can only manage the consumption. You try to offset that; you try to increase utilization if you can.”

Domenico runs 45 reefer and dry van trucks, largely hauling foodstuffs.

“We’ve done several things, and we’ve been doing it since 2003,”  Domenico said. “We spec the trucks way differently” than many competitors, he said.

His trucks are equipped with automatic transmissions, and he started using wide-base tires in 2005, he said. “That gives us quite a bit of savings,” said Domenico, who is chairman of the Colorado Motor Carriers Association. “And we slowed the trucks down,” he added. “We govern 62 [mph] on the foot and 64 on cruise.”

Domenico also said his trucks have electronic onboard recorders to promote safety and help cut fuel consumption.

In Stockton, Calif., Mike Williams of Williams Tank Lines, hauls diesel fuel. At the same time, he said, he works to keep his own fuel costs down with surcharges and such tools as super-wide tires.

“We run 170 trucks, and we have a fuel surcharge in place . . . and we . . . adjust [it] every week,” Williams said.

His biggest fuel saving is coming from the dozens of new trucks the fleet began purchasing last year, he said.

“They are getting better mile­age,” Williams said. “I would say average, probably a mile-and-a-half to 2 miles-per-gallon better.”

The new trucks are averaging in what he calls the “low 7s” in miles per gallon, “where 10 years ago we were doing maybe 5, 5.2,” he said of his old trucks.

To promote clean air, the California Air Resources Board is paying 50% of the cost — about $60,000 — for each of the new trucks Williams has purchased, he said, adding that he is expecting 24 more trucks to arrive soon to replace others in his fleet.