By Frederick Kiel, Staff Reporter This story appears in the Oct. 25 print edition of Transport Topics.
The U.S. retail diesel and gasoline averages both rose again last week, the Department of Energy reported, but the increases slowed as crude oil prices continued a recent slide.
Diesel rose 0.7 cent to $3.073 a gallon, its fifth increase in the past six weeks, DOE said Oct. 18 after its survey of the nation’s fuel stations. Gasoline increased 1.5 cents to $2.834 a gallon, also its fifth rise in the past six weeks.
Diesel had increased 6.6 cents on Oct. 11 and 4.9 cents on Oct. 4, while gasoline jumped 8.7 cents on Oct. 11 and 3.8 cents on Oct. 4. Since the start of September, diesel is up 14.2 cents and gasoline, 15.2 cents.
The gains left diesel 36.8 cents a gallon higher than in the same week a year ago, while gasoline was 26 cents more expensive.
“Most of the surge in retail fuel prices related to the recent $10 a gallon-plus spike in crude oil has already taken place, and prices have consolidated at these higher levels,” Phil Flynn, senior energy analyst at commodities trading firm PFGBest, Chicago, told Transport Topics.
On Oct. 21, crude oil prices closed at $80.56 on the New York Mercantile Exchange. It had traded as high as $83.23 as recently as Oct. 6, Bloomberg News reported.
“This recent price hike has been a major concern for several reasons, and if it’s going to stay up, that’s even worse news,” Frank Riordan, president of regional less-than-truckload carrier Becker Trucking Inc., Tukwila, Wash., told Transport Topics.
“Even though we save 6 cents a gallon by having our trucks filled by wet-hose at our terminals, we still paid $3.25 a gallon,” Riordan said. “Even on accounts where we have full fuel surcharges, we still have to wait 41 days to get paid, and at 20 cents a gallon extra to wait for, that’s a hit.”
Becker runs 50 tractors and 100 trailers on routes in the Pacific Northwest and into British Columbia.
“We’re also dealing with more and more shippers who have grown quite resistant to paying any fuel surcharge at all,” Riordan said. “There’s still a lot of excess capacity out here, so if you don’t accept it, they’re happy to go elsewhere.”
Riordan said he negotiated contracts with such shippers to take fuel prices into account, but not the sharp increases in the past six weeks.
“Our only way to cut costs is to talk to our regular customers who aren’t shippers and tell them we need some help, but they’ve not been overly receptive,” Riordan said.
