Diesel Up for Fifth Straight Week to $2.946; Gasoline Gains 3.1¢
This story appears in the March 29 print edition of Transport Topics.
The U.S. retail diesel average increased 2.2 cents to $2.946 a gallon last week for its fifth straight increase, the Department of Energy reported.
Diesel now has jumped 19 cents a gallon since Feb. 15, when it was at $2.756. It is 85.6 cents higher than a year earlier, DOE said after its March 22 survey of fueling stations.
The last time diesel was selling at such a high price was on Nov. 3, 2008, when the average price per gallon was $3.088.
DOE also reported the average price of gasoline was $2.819, up 3.1 cents a gallon over the price of $2.788 for the previous week. Gasoline, which has increased 21.1 cents since Feb. 15, was at $1.962 during the same week in 2009.
Dan Coleman, president of D.G. Coleman Inc., a general freight hauler in Commerce City, Colo., told Transport Topics that after a year spent focused on the economy, fuel prices are quickly becoming the top concern again.
“I hear a lot of people talking about it, saying, ‘You know what? We can’t afford these prices,’ ” said Coleman, chairman of the Colorado Motor Carriers Association.
Coleman said that, as prices continue to rise, he is counting on measures his firm took back in 2008 to counter rising fuel costs.
For example, he said, as he replaces trucks in his 100-unit fleet, he buys models with auxiliary power units, which has cut idling from an average 20% of engine time down to 5%.
The fleet also began an aggressive training program with drivers, especially those driving older trucks.
“We’re on our drivers constantly,” Coleman said. “We watch them when they come into our terminals, and we’re trying to teach them: . . . pull in, set the brakes, turn the motor off.”
Farther west, in California, DOE said the average diesel price last week was $3.072, or 12.6 cents higher than the national average.
Robert Ramorino, owner of RoadStar Trucking Inc. in Hayward, Calif., said truckers in the state are hurt by the differential because shippers refuse to pay a fuel surcharge based on regional prices. They want national diesel price averages, he said.
For his firm, a regional carrier in the San Francisco Bay Area, cutting fuel use and costs is difficult.
“I have elements of SmartWay in low resistance tires and aerodynamic devices on my tractors, but as far as putting those on the trailing fleet, in my type of 200-mile-radius operation there is no benefit there,” Ramorino said.
“We’ve tried to reengineer all of our routes and the way that we dispatch and . . . just reduce empty miles,” he said.
He also works with customers to set up delivery times that do not idle his trucks in heavy traffic, he said.
On March 25, crude oil closed at $80.53 a barrel on the New York Mercantile Exchange, almost $10 higher than the $71 close in early February. On March 26, 2009, crude closed at $54.34.
On March 24, DOE reported that U.S. crude oil inventories rose for an eighth week to 351.3 million, 6.4% above the five-year average.
The report also showed that distillate fuel inventories, including heating oil and diesel, declined 2.42 million barrels to 145.7 million, and gas stockpiles fell 2.72 million barrels to 224.6 million.
Chris Barber, a crude oil analyst at Energy Security Analysis Inc. in Wakefield, Mass., said that oil prices, rather than demand, have been driving diesel prices, and crude markets have been volatile since December.
Crude prices are rising and falling on investor perceptions about the economy, Barber said.
“Just everyone sort of jumping onboard any kind of positive economic data and, whenever there’s something strongly negative, they kind of pull back,” he said.
