Diesel Fuel Prices Slip, Fall to Nine-Week Low

The price of diesel fuel continued its downward trend, hitting a nine-week low of $1.065 a gallon May 31, one-tenth of a cent off the previous week’s national average. Gasoline prices, which had been expected to rise, also dropped by 1.5 cents to $1.151.

The diesel price fell steadily early in 1999, reaching a historic low of 95.3 cents Feb. 22, then soared to $1.084 April 12, spurred, in part, by refinery problems in California.

The latest national average reflects drops in five of nine sampling regions. Prices remained unchanged in the Lower Atlantic and Gulf Coast regions and rebounded slightly in California and the West Coast.

The increases in California were the first reversal in eight weeks of steady reductions — made as refineries that had been shut down came back on line. At one point when the price of the special fuel California truckers are required to buy rose to nearly $1.45 a gallon, the California Trucking Association petitioned Gov. Gray Davis for clearance to purchase diesel from outside the state — which is not specially formulated to be lower in sulfur and other aromatics.

The governor denied the request, but the price began to drop, taking care of the immediate problem. However, CTA advanced a series of policy initiatives aimed at providing long-term remedies for fuel price “spikes” (4-26, p. 58).

Analysts for American Trucking Associations attributed a “bearish trader environment” to new announcements of refinery cutbacks, made in response to relatively low demand.

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