Diesel Average Hits Five-Year Low
This story appears in the April 6 print edition of Transport Topics.
Diesel’s national average retail price fell to a five-year low, dropping 4 cents to $2.824 a gallon, the Department of Energy reported.
Last week’s price was the lowest since trucking’s main fuel was $2.756 per gallon on Feb. 15, 2010, according to DOE records.
The cost of a gallon of diesel has declined 12 cents in three straight downturns — which followed five consecutive increases tallying 11.3 cents. The slide left diesel $1.151 below its level a year ago, DOE’s Energy Information Administration said March 30 after its weekly survey of filling stations.
“All indicators are for prices to continue to fall,” said Roger
McKnight, senior petroleum analyst with En-Pro International in Oshawa, Ontario.
“This is really the end of the heating-oil season, which is what drives diesel through the winter months,” he said. “Diesel prices are down on both sides of the [U.S.-Canadian] border.”
Gasoline, meanwhile, dipped almost a penny, dropping 0.9 cent to $2.448, the second decline in three weeks and leaving the motor fuel $1.131 below the corresponding week last year.
Aside from the end of winter, low oil prices also point to lower diesel prices ahead.
Refineries are starting to come back to full capacity after being partially offline in February and March for maintenance and changing to warm-weather fuel blends, McKnight said.
“Diesel inventories are good, and gasoline and crude inventories are at maximum levels,” he said, adding that diesel prices in Canada have been dropping “rather healthily and in lockstep with the U.S. DOE prices.”
An executive with one Midwest regional truckload carrier said last week that the drop pushed its fuel surcharges to the lowest level in five years.
“It’s great for us and for our customers,” said John Crass, fleet manager for Marth Transportation in Marathon, Wisconsin.
Marth is working with drivers to reduce idling, putting speed governors on its 25 trucks and planning to buy new trucks with automated manual transmissions to save money on fuel, Crass told Transport Topics.
It also buys about 80% of its fuel for its on-site tanks, and gets on-road discounts through the National Association of Small Trucking Companies, he said.
“One thing we’ve found is the truck stops are really holding up the price of fuel,” he said. “It’s not as bad as it was three months ago, but we were getting 80-cent discounts” compared with the pump price via its discount program.
Marth has “a couple” of auxiliary power units and is considering incentive programs to help its drivers lower their idling rates, Crass said.
“We’re trying to voluntarily get them to change their behavior a little,” he said, adding that the carrier governs speeds at 68 mph on cruise control and 65 mph on standard accelerators.
Oil, meanwhile, increased $2.49 on April 1 to finish New York Mercantile Exchange trading at $50.09 a barrel — topping the $50 mark for the second time since March 5. It ended on April 2 at $49.14 a barrel.
