Fuel Price Spike Flattens Out
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However, the Rocky Mountain region registered an increase of 2 cents a gallon, The West Coast rose 1.4 cents, despite a reported 0.7-cent drop in California, to $1.44 a gallon, as refineries came back on line.
The national average of $1.084 is the highest weekly price posted since the week of Feb. 9, 1998, when the average was $1.085, according to figures from the federal Energy Information Administration.
The drop in California fuel prices was disputed by some truckers, especially in the San Francisco Bay area, where street prices were said to be in the range of $1.58 — higher than any price reported by official sources.
Sam Cross, director of safety and maintenance at Condor Freight Lines in Hayward, Calif., said fuel prices have sharply increased the company’s cost of operations. He said fuel costs went from 9.5 cents a mile in February to 12.3 cents in March.
Moreover, said Bob Ramorino, president of Bob Rich Schroeder Trucking, Inc. in Hayward, Calif., attempts to institute surcharges have met with resistance from customers.
"They just send the bill back, with the fuel surcharge crossed off," he said. "Sometimes, they will write on the bottom: ‘Why didn’t we get a refund when prices were low?’ "
Ramorino said freight contracts were written in line with prevailing costs at the time, and the drop in fuel prices helped to keep freight rates from rising. He said the continued increases could force some truckers out of business if they are unable to pass at least a portion of them along in their rates.
The Bay Area has not benefited from refinery reopenings, Ramorino said.
"Two here are still closed, and one may never reopen," he said.
Truckers in the state will soon receive more bad news.
Gov. Gray Davis has apparently rejected the California Trucking Association’s request to relieve truckers of the need to buy special low-sulfur fuel, a requirement that applies only to truckers in California.
While the CTA had not as yet received a formal response, a story on Davis’ rejection appeared in a government newsletter.
Gasoline prices continued to creep upward — 2.2 cents in the past week. But the wholesale price of New York Harbor low-sulfur diesel edged downward by about 4.2%. Although the national average for wholesale diesel prices saw a minute increase of less than one-fifth of a percentage point, two other important markets — Chicago and Houston — experienced drops similar to the cost of New York Harbor diesel.
Bob Costello, director of American Trucking Associations’ Economic and Statistical Analysis Department, warned that the drop is a "mini-correction" and "should not necessarily be taken as a change in course."
