Diesel Tops $3 a Gallon as Year Comes to a Close
By Michael G. Malloy, Staff Reporter
This story appears in the Dec. 20 & 27 print edition of Transport Topics. Click here to subscribe today.
For 2010, diesel prices averaged just below $3 a gallon, and the trend at the end of the year was well above that watershed level.
After starting the year at $2.797, the U.S. diesel average rose above $3 in early April for the first time in almost a year and a half, according to the Department of Energy. It remained above $3 for two months, before sliding into the $2.90s for most of the summer. It then resumed its climb in the fall in tandem with higher oil prices.
It hit $3 again in October, then steadily rose, hitting a 2010 high of $3.231 a gallon on Dec. 13, its highest since the $3.288 national average of Oct. 27, 2008.
Gasoline also rose from a year ago, reaching an average of $2.98 on Dec. 13, its highest since Oct. 13, 2008, when it registered $3.151 per gallon — though it was above the Dec. 13 level on the West Coast.
The 2010 gasoline average through Dec. 6 was $2.77 a gallon — up 42 cents from last year but well below the $3.24 record 2008 average.
It jumped 10.2 cents in DOE’s Dec. 6 price survey to $2.958 a gallon, the biggest single-week jump since May 2009 and its highest level since October 2008. The low this year was $2.61, set in February.
Diesel’s low this year was $2.75 a gallon, also in February, and trucking’s main fuel averaged $2.98 through early December, about 50 cents higher than last year.
The highest price last year was $2.81, while the low was $2.46. But one analyst said that the relative lack of volatility this year did not translate to lower prices at the pump for truckers.
“This has been an unusual year, with less volatility in oil, gasoline and diesel prices than we saw in 2006 to 2009,” said Tom Kloza, director of editorial content for the Oil Price Information Service in Wall, N.J.
From late September through mid-November, crude prices jumped about $14 per barrel, equating to an increase in raw feedstock costs of about 33 cents per gallon for refiners, Kloza said. It rose to $89.38 a barrel on the New York Mercantile Exchange on Dec. 6, its highest since finishing the trading day over $90 on Oct. 7, 2008, according to Bloomberg News.
Crude is a major component of end-fuel prices, according to DOE, but beyond the correlation to oil prices, Kloza cited a “very brisk global demand for diesel” as a key driver in its rising price.
He noted that the United States “has been a huge [diesel] exporter this year,” sending about 700,000 barrels a day to South America, Europe and Asia to meet surging world demand.
The higher price at year-end is likely to continue next year, DOE said in early December, predicting the average will jump to $3.23 in 2011, based largely on higher oil prices. DOE said oil will average $84 this winter and near $90 per barrel by the end of 2011.
Truckers have undertaken various strategies to cope with higher prices beyond keeping their fuel surcharges as current as possible, from limiting where their drivers can fill up to adding equipment such as auxiliary power units and more fuel-efficient tires.
Others make sure to keep their trucks fully loaded to avoid sending out extra trucks for runs and maximizing maintenance to keep engines at maximum efficiency and improve mileage.
