July 23, 2007 7:45 AM, EDT

Diesel Price Rises 4¢ to $2.889

Gas Jumps 6.8¢, Oil Nears $76

By Transport Topics Staff
This story appears in the July 23 print edition of Transport Topics.
The average U.S. retail price for diesel fuel reached its highest level since September last week after rising 4 cents to $2.889 a gallon, the Department of Energy reported. DOE said the price increase was driven by soaring crude oil prices.
Meanwhile, the retail gasoline average rose 6.8 cents a gallon to $3.049, DOE said in its July 16 survey of fueling stations, while crude oil surged to about $76 a barrel.
“A combination of two factors has been pushing prices up steadily since January: crude, which has risen $25 to $35 a barrel, and refinery shutdowns, both for scheduled maintenance and unexpected technical problems,” Doug MacIntyre, an analyst at DOE’s Energy Information Agency, told Transport Topics.
The diesel increase last week was the fourth in five weeks, leaving commercial trucking’s main fuel at its highest level since Sept. 4, when it was $2.967. Although diesel is 3.7 cents below the price in the corresponding week of last year, it is now 47.6 cents above its lowest level this year — $2.413 — set on Jan. 29.
Based on that price difference, a truck driver had to spend $577.80 on a 200-gallon purchase at a retail pump, or $95.20 more than at the end of January.
The gasoline increase was the second straight, moving it six cents higher than the corresponding week a year earlier. Gas had dropped six straight weeks since hitting an all-time high of $3.218 on May 21, before the most recent run-up.
Commercial trucks use an average of 730 million gallons of diesel and 290 million gallons of gasoline each week, according to American Trucking Associations.
Henry Griffin, president of for-hire Southern Ag Carriers, Albany, Ga., said increased attention to surcharges and route management have enabled his company to maintain a profit.
“Our fuel surcharge program has certainly helped us to stay in the ball game,” Griffin told TT. “The problem is, truckers have to pay 100% of the fuel increases immediately, but no trucking company is going to be able to collect 100% of its fuel surcharges, and when your client pays the bill, that could be a month or two down the road.”
Southern Ag, with three terminals in Georgia and one in Texas, runs 165 company-owned trucks and 150 trucks either leased or with owner-operators.
“We set up routes so that we run as many miles with loads as we can and with as few deadhead miles as possible, and we also have a fuel incentive program for our drivers that’s working well in cutting diesel [costs].”
Griffin said 65% of Southern Ag’s business is as a dedicated regional carrier, with the farthest delivery points 175 miles from each of its four terminals in Georgia and Texas.
Buster Anderson, executive vice president of the National Association of Small Trucking Companies, said surcharges are helping NASTC’s members overcome volatile fuel prices.
“Even a small truck company, if they’ve done their due diligence, by and large should be in pretty good shape in this climate of very high and fluctuating fuel prices,” Anderson said. “No company is going to get 100% of a fuel surcharge, but we assist truckers in setting up programs that get them the highest possible percentage back.”
Meanwhile, the price of crude oil futures on the New York Mercantile Exchange closed at $75.92 a barrel on July 19, news services reported, after touching $76 earlier in the day.
Oil had closed above $75 a barrel on July 18 for the first time since Aug. 9. On Jan. 18, crude fell as low as $49.90 a barrel, the lowest price this year, Bloomberg reported.

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