By Transport Topics Staff
The average retail price of diesel fuel fell 1.3 cents last week to $3.035 a gallon, the first decline after five straight increases, the Department of Energy said.
Regular gasoline prices also dropped, by 1.8 cents, to an average of $2.77 gallon, DOE said after its Oct. 8 survey of fueling stations.
Despite the dip in the national average, diesel prices on the West Coast surged 7.7 cents to $3.167, DOE said. Prices also rose in the Rockies by 3.9 cents.
“There are numerous refinery problems out here, the list is long, and that’s why the market is going up. We still have the same demand; that’s not changed. We just don’t have the production,” said Larry Roberts, supply manager at Tower Energy Group, an independent gasoline wholesaler in Torrance, Calif. Roberts was quoted in the Los Angeles Times.
Nationally, “two main reasons probably accounted for the slight dip in diesel prices last week: the largest supply ever of ultra-low-sulfur diesel, and crude oil prices did not shoot up . . . ” Ron Planting, an economist at the American Petroleum Institute, told Transport Topics.
Planting said domestic ULSD production reached a record in September, pushing the inventory this month to 69.8 million barrels, a new record. That total is up from 66 million barrels in September and 50 million barrels a year earlier, he said.
Despite the decline last week in the national diesel average, the price is 52.9 cents higher than a year ago.
Liz Tate, secretary-treasurer for Tate Transportation, a Walla Walla, Wash., fleet with 210 trucks, said the company was “really feeling it.”
“We put in a fuel surcharge a few years ago, but it never covers more than half the fuel increases,” Tate said. “We’ve upgraded our equipment as we turn over trucks to get more fuel-efficient and raised freight rates, simply to try and make up for the fuel costs, but it doesn’t work.”
However, she added that installing an underground fuel tank has helped the company save about 20 cents a gallon off retail prices.
Cary Chasteen, fleet operations manager for Chasteen’s Inc., Barnesville, Ga., said he asks drivers to pull over and park if they are low on fuel and prices will dip after midnight.
“If the wholesaler tells me that diesel will drop 5 cents the next day, I send out messages to all my drivers and tell them that if they get low, to pull over and rest until midnight,” he said.
On the New York Mercantile Exchange, crude oil closed at $83.08 a barrel on Oct. 11, nearly unchanged from its price of $82.88 on Sept. 27.
Also last week, EIA said in its latest short-term energy outlook that diesel prices are expected to average $2.98 a gallon in the fourth quarter, up 6 cents from the third quarter and 42 cents above a year earlier.
