Editorial: Fuel Prices Continue to Decline
uel prices continued to fall last week, albeit slightly, despite analysts’ expectations that events in the Middle East would drive prices upward.
Diesel prices have fallen 2.1 cents over the past three weeks, to a national average retail of $1.302 per gallon, according to the Department of Energy.
While the recent declines have made only a small dent in the price of diesel, which rose 16.9 cents a gallon over the six previous weeks, they are a lot better than what some had predicted in the wake of Israeli-Palestinian conflicts this year and the U.S. war of words with Iraq.
Meanwhile, a Senate committee report charged that the oil companies have manipulated gasoline supplies and prices, despite denials by the refiners.
“Last year’s increases in the cost of gasoline, along with rises in the prices of other petroleum products, helped push the American economy into a recession, and this year’s increases are threatening the recovery,” the report said.
While the report focused on gasoline, much of what it included clearly applies also to diesel, the mainstay of the over-the-road trucking industry.
Sen. Carl Levin (D-Mich.) told a panel of oil industry officials that he believes the report shows that their companies have plotted to control supplies in order to manipulate the price of gasoline.
Levin, chairman of the Governmental Affairs Permanent Subcommittee on Investigations that produced the report, said, “The refining market is so concentrated that oil companies can act to limit supply, and from time to time spike prices to maximize profits.”
The oil executives denied their companies had manipulated fuel prices, and blamed the erratic price movements on various market forces.
The Senate inquiry began in June 2001, after a sharp rise in gasoline prices that were blamed on various refinery problems.
The report underscores how important fuel prices are to the nation in general, as well as to trucking in particular. High gasoline and diesel prices have the ability to stifle the economic recovery that is currently underway by raising freight costs and by sapping national income.
Let’s hope that fuel prices remain stable, in the worst case, or fall, for the good of us all.
This story appeared in the May 6 print edition of Transport Topics. Subscribe today.
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