Diesel Average Slips 0.6¢ to $3.067

This story appears in the Nov. 1 print edition of Transport Topics.

The average retail price of both diesel and gasoline dipped last week for the first time in a month, the Department of Energy reported.

Diesel slipped 0.6 cent to $3.067 a gallon, DOE said after its Oct. 25 survey of fueling stations. The gasoline average declined 1.7 cents to $2.817.

Diesel, trucking’s main fuel, had gained 12.2 cents over the four weeks leading up to the dip last week. Over that same span, gasoline had increased 12.3 cents.

Diesel is now 26.6 cents higher per gallon than it was a year ago, while gasoline is 14.3 cents more expensive.

The price dip was a fluke because demand for diesel exported from the United States should be pushing prices upward, said Andrew Reed, an oil analyst at Energy Security Analysis Inc., Wakefield, Mass.

Domestic diesel demand is “fragile,” Reed said. But, he said, “Globally, demand is growing,” which explains the recent price increases and the fact that recent price declines have been very small.

Meanwhile, Bear Cat Inc., a liquid asphalt carrier based in Klamath Falls, Ore., said that it depends mostly on its drivers to keep control of fuel costs.

“The main thing we do is just driver education,” said Dale Wetzel, the carrier’s dispatcher. Bear Cat runs about 30 trucks in southern Oregon and northern California.

The carrier teaches its drivers to handle trucks in ways that improve mileage, such as avoiding quick acceleration and not speeding, and encourages drivers to fill their tanks at the terminal.

“That’s about all we can do” to control costs, Wetzel said.

Wetzel also buys fuel in bulk, and says that prices have averaged $3 per gallon recently.

Mealer Trucking, Lewisburg, Tenn., said it’s hard to get increased rates or surcharges when fuel prices are rising because it is heavily dependent on one customer, said Diane Holder, a co-owner of the family-run carrier.

“We complain, and they’ll do a surcharge when it gets really bad,” Holder said, but even with recent increases in fuel prices, the fleet’s rates have remained level.

Holder buys fuel in bulk for Mealer’s 28 trucks and gets a discount of about 10 cents per gallon, she said. She buys about 7,900 gallons of diesel per week, so the company saves about $790 each week.

When it comes to making changes to increase efficiency in the fleet, however, “there’s not really much we can do right now,” Holder said. The company frequently must dispatch trucks from long distances to serve its primary shipper, wasting fuel in the process.

The Mealer fleet hauls stone, sand and similar materials.

DOE’s survey showed the average retail price of diesel on the West Coast to be $3.243 per gallon last week, 17.6 cents higher than the national average.

Meanwhile, crude oil futures for December delivery fell 61 cents on Oct. 27 to settle at $81.94 per barrel on the New York Stock Exchange, Bloomberg News reported. That followed three consecutive days of increased prices in trading.

Earlier that day, a DOE report showed that crude oil inventories rose by 5 million barrels, or 0.3%, from the week before, leaving them at 362.2 million barrels, the highest level since June.

Reed of Energy Security Analysis said ongoing labor strikes in France had played a role in recent fuel price increases.

“The strikes have basically halted refinery output of diesel,” he said.

Workers in France have organized strikes to protest legislation that would raise the retirement age.

“This is the time of year when Europe really boosts its imports. And that’s made worse by the strikes,” Reed said, predicting that the demand will continue to push U.S. prices up.