Lower Fuel Prices Have Broad Impact
John Sommers II for Transport TopicsWhen your trucks average 8 miles per gallon, lower gasoline prices at the pump can be a welcome addition to the bottom line.
“We charge a straight hourly rate and we don’t adjust that for fuel prices,” said Becky Esker, owner of Heck’s Transfer, a Cedar Rapids, Iowa, moving company. “Right now, the cost savings is wonderful.”
As the price of crude oil has plummeted from $100 a barrel to just $30 a barrel because of an oversupply and a slacking demand worldwide, the average price of unleaded regular gasoline dropped to $1.91 a gallon and diesel fuel dipped to an average $2.11 a gallon on Jan. 18, according to the U.S. Energy Information Administration.
For the Cedar Rapids Community School District, which operates a fleet of school buses averaging 5 or 6 mpg, lower diesel fuel prices is welcome news.
“Any cost savings is a huge benefit, especially at this time of year when we’re having to start buses in the mornings with temperatures in the teens,” said Denny Schreckengast, district transportation manager. “We start and run them for 10 or 15 minutes earlier than normal so they are a little bit warmer and act a little better mechanically.”
Diesel prices have dropped about 13 to 16 cents a gallon since December, he said, depending on the grade of fuel. “And at a million miles (driven) per year, any reduction in price is really helpful,” he said.
On a much smaller scale, delivery drivers for Jimmy Johns sandwich shop are seeing a direct benefit.
“The drivers are making more money because they’re responsible for fueling their own cars,” said Nick Warson, area manager for the chain. “That’s more money in their pocket and less that they have to put in their cars.”
Warson said, though, the company has not seen any corresponding savings from wholesale food suppliers as fuel prices have dipped.
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|By George C. Ford|
The (Cedar Rapids, Iowa) Gazette
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