News Briefs - March 6
The Latest Headlines:
- EIA Predicts Record Gas Prices in April
- UPS Suspends Plan to Furlough 100 Pilots
- Crude Oil Price Rises on Possible Second UN Resolution
- MAN AG Increases 4Q Profit 13%
- Natso Responds to ATA's Fuel Gouging Warnings
- Abraham Says Supply, Not Gouging, Responsible for Fuel Prices
- Senate Report Blames SPR Filling for High Fuel Prices
- UPS Suspends Plan to Furlough 100 Pilots
EIA Predicts Record Gas Prices in April
The Energy Information Administration said Thursday that U.S. consumers will likely pay an average of at least $1.76 a gallon for gasoline, Reuters reported.If gasoline prices do in fact reach $1.76, that would be a new record high, EIA said.
EIA is the analytical arm of the Department Energy. It provides weekly looks at the national average prices of diesel fuel and gasoline.
UPS Suspends Plan to Furlough 100 Pilots
United Parcel Service Inc. said Thursday that it was suspending its plans to furlough up to 100 pilots, due to a “favorable response to voluntary leave and separation offers” as well as loss of staff to military service.In February, the Atlanta-based shipping giant said it might have to furlough as many as 100 pilots during 2003 (Click here for related coverage.).
Nineteen pilots were identified for furloughs in March, the company said, and a total of 36 UPS pilots asked to participate in the company’s voluntary separation plan and voluntary leave plans. An additional 56 UPS pilots are currently on active military duty, the company said.
"We had hoped the voluntary leave and separation offers would be effective and they certainly have been," said Airline Operations Manager Rick Barr. "The response has allowed us to suspend these furloughs for the foreseeable future."
UPS is ranked No. 1 on the 2002 Transport Topics listing of the largest trucking companies in the United States and Canada. Transport Topics
(Click here for the full press release.)
Crude Oil Price Rises on Possible Second UN Resolution
The price of crude oil rose 30 cents a barrel to $36.99 in early morning trading Thursday on the New York Mercantile Exchange as the United States and United Kingdom continued to push the United Nations for a second resolution authorizing the use of force in Iraq, Bloomberg reported.Crude oil prices have risen sharply since the start of 2003, pushing up the cost of fuels like diesel and gasoline, which are distilled from crude oil.
The United Kingdom said it may modify a proposed resolution to give Iraq one final chance to disarm in an effort to persuade France, China and Russia to allow such a measure to go forward, Bloomberg said. Those three countries hold veto votes in the UN Security Council and can unilaterally block any resolution.
U.S. Secretary of State Colin Powell said Wednesday at the United Nations that the U.S. has new proof that Iraq is hiding weapons of mass destruction, adding the U.S. may go to war with a coalition of allies if the Security Council does not act, Bloomberg said. Transport Topics
MAN AG Increases 4Q Profit 13%
MAN AG, the No. 3 truck maker in Europe said that reductions in its workforce and a surge in earnings at its truck division led to a 13% increase in profits during the fourth quarter.Fourth-quarter net income for the Munich, Germany-based company rose to $130.7 million from $115.4 million from the same quarter the previous year.
The company’s truck division had pretax profit of $96.6 million – up 12 times, Bloomberg said.
Profits fell 59% at MAN’s diesel engine division, the company said. Transport Topics
Natso Responds to ATA's Fuel Gouging Warnings
A trade association representing travel plazas and truckstops sent a letter Thursday to American Trucking Associations President Bill Graves and state attorneys general stating that truckstops are not involved in gouging prices of diesel or other fuels.Graves wrote the Federal Trade Commission and the attorneys general of all 50 states Monday asking officials to "be vigilant of potential diesel fuel price gouging." ATA spokesman Mike Russell noted that Graves had not accused anyone of price gouging in the current situation, and had only asked authorities to be on guard against potential gouging.
William D. Fay, president of Natso Inc., said that escalating diesel fuel prices are the result of higher crude oil prices. He pointed to tightening supplies of crude, which he said were the result of “uncertainty about Iraq,” the strike in Venezuela and an unusually cold winter.
"It is sad that the trucking industry has decided to ignore the geopolitical factors that have sent crude oil prices skyrocketing and instead point fingers at a trucking community partner, America's truckstops," Fay stated. Transport Topics
(Click here for the full press release from Natso.)
(Click here for related TTNews coverage of Graves' letter.)
(Click here for the full text of Graves' letter.)
(Click here for more of Graves' comments on the fuel situation.)
(Click here for more of Graves' comments on the fuel situation.)
Abraham Says Supply, Not Gouging, Responsible for Fuel Prices
Energy Secretary Spencer Abraham said that reduced supplies, owing mainly to the strike in Venezuela, are responsible for higher fuel prices, not price gouging, USA Today reported.Abraham made the comments during a forum with the paper’s editorial board, USA Today said. He also cited reductions in output by the Organization of Petroleum Exporting Countries in recent years as another cause for tightening supply, the paper said.
In testimony Wednesday before lawmakers, Abraham said the Bush administration would not tap the Strategic Petroleum Reserve to inject more oil into the market and reduce prices. The SPR would only be tapped, he said, in the event of a major supply disruption or another similar emergency, Reuters reported.
In recent weeks, American Trucking Associations President Bill Graves wrote letters to the secretary, President Bush and other government officials about the issue of potential price gouging and urging the government to tap the Strategic Petroleum Reserve. Transport Topics
Senate Report Blames SPR Filling for High Fuel Prices
A report by Democrats in the Senate said that the federal government’s efforts to fill the Strategic Petroleum Reserve contributed to recent increases in fuel prices, the Associated Press reported.The report, issued Wednesday, said that as oil markets started to get tight, the Department of Energy stopped its practice of diverting shipments to the SPR to U.S. refiners, AP reported.
Prepared by Democrats on the Senate Governmental Affairs Committee, the report contends that without those extra shipments, refiners dipped into their own reserves to meet demand, and eventually this practice led to higher prices, AP said.
Energy Secretary Spencer Abraham rejected the theory that government’s actions drove up prices, saying the amount was too small to make a significant impact, AP reported.
