Editorial: Worrisome Fuel Prices

Once again, diesel fuel and gasoline prices are in the worrisome range, just as most of us are beginning to accept that the recession is really over and better times are ahead.

Prices in recent months have been affected by a number of different factors. But the one thing that has been consistent is the direction of the changes: up. 

Editor’s note: Diesel jumped 9.1¢ on Monday, Feb. 27, to more than $4 a gallon.

First the word was that increased demand was beginning to push prices higher.

After it became clear that the overall European economy was close to stalling, as several of the weaker EU nations had serious budgetary woes, the new excuse was that U.S. refiners were exporting diesel to Europe, since they had an excess amount and most cars and trucks there use that fuel.

Now, it’s world political concerns, namely Iran’s threats to close the Strait of Hormuz if the western world continues to challenge that nation’s nuclear program.

Retail prices are now around record levels for this time of year, despite the fact that the demand for home heating oil — which is basically identical to diesel — has been low in the United States, thanks to the extremely mild winter.

These developments all seem to make some sense, but it’s interesting how one keeps coming after the other.

The biggest concern, of course, is that rising fuel prices could sap the energy out of the economic recovery. Not that fuel price increases aren’t a problem all by themselves.

But fleets are moving diligently to find other ways through the fuel price spiral, as we are seeing increasingly in the pages of Transport Topics.

High fuel prices and price volatility are helping drive fleets toward alternative fuels, which seem to offer not only lower prices but more stability, since many of those fuels are being produced in this country.

There has been a steady drumbeat of stories about new product offerings for vehicles that run on various forms of natural gas, which is in plentiful supply domestically. This week, one large fleet talked about its plan to wean itself from diesel and is currently in the process of buying 15 tractors to run on compressed natural gas (see story, p. 1).

Coupled with the seemingly universal drive by fleets to improve the number of miles they wring out of every gallon of fuel, this drive to alternative fuels appears to offer a way off the price spiral.