Diesel Dips to $2.676
The U.S. average retail price of diesel fuel dipped by 0.5 cent to $2.676 a gallon last week, its second straight tiny decline, while the gasoline average climbed 3.3 cents to $2.61 a gallon, according to the Department of Energy.
Also last week, crude oil futures rose to their highest levels in more than six months on concern that growing political tensions involving Iran could disrupt exports.
Diesel has now slipped 0.9 cent over two weeks, after climbing 27.2 cents over the prior six weeks, DOE said after its March 26 survey of fueling stations.
“The latest decrease in diesel prices occurred because diesel wholesale prices dropped,” Doug MacIntyre, an analyst with DOE’s Energy Information Administration, told Transport Topics. “Current retail prices are reflecting what happened a week or two ago, and we’re still seeing the impact of that decline.”
Since the beginning of the year, diesel has increased 9.6 cents a gallon and is now 11.1 cents higher than it was in the same week a year ago.
DOE also said the national gasoline average, which has risen for the past eight weeks, has jumped 44.5 cents since Jan. 29 and is 11.2 cents above the corresponding week in 2006.
MacIntyre noted that warmer temperatures have lowered the demand for home heating oil, thus increasing the amount of distillate stocks available for diesel fuel. At the same time, “Gasoline demand is starting to increase because we are at the beginning of the summer travel season,” he said.
DOE reported gasoline inventories fell by 300,000 barrels to 210.2 million barrels last week, continuing a seven-week string of declines.
“Generally, we see prices go up when inventories go down, and that would affect diesel prices if gasoline inventories got so low that refiners have to increase their gas production at the expense of diesel,” MacIntyre said.
Trucking companies said they were continuing to study ways to reduce fuel consumption and improve their bottom lines.
Tex Pittfield, president of Sara-guay Petroleum, an Atlanta fuel hauler, said even with surcharges in place, the company absorbs about 10% of its fuel cost.
“We’re in stop-and-go traffic all day and we’re continually idling at terminals, so there is not much we can do to improve the situation,” Pittfield said. “It’s very difficult to improve efficiency over what we’re already doing, but we have recently put automatic transmissions in our trucks.
“We’re seeing about a 5% increase in fuel efficiency that saves us a couple thousand dollars a month in fuel,” he continued. The price of fuel is still “nowhere near where I’d like it to be, but the transmissions are an improvement, and any little bit helps.”
Saraguay Petroleum, which has 18 trucks, currently spends about $60,000 dollars a month to burn 40,000 gallons of fuel, Pittfield said. James Cade, executive vice president of maintenance for Arrow Trucking, a Tulsa, Okla., truckload carrier that operates 1,500 trucks, said his company has reduced its fuel costs by using electrification systems at truck stops to cut idling.
“We have multiple ways of dealing with [high fuel prices], but reducing idle time has really made a big difference for us,” Cade said. “If you can shut off the truck and still keep the driver comfortable, it’s a lot better for fuel cost and the wear and tear on the engine.”
Meanwhile, crude oil prices on the New York Mercantile Exchange rose to nearly $65 a barrel March 29 on concern that escalating tensions with Iran will disrupt oil supply from the Middle East.
In late March, the United Nations strengthened sanctions against Iran over its atomic energy program. In addition, Iran detained 15 British naval personnel, which raised concern that strained relations between the second-largest producer in the OPEC oil cartel and the West could disrupt global supplies, Bloomberg News reported.
Oil’s closing price of $64.08 a barrel on March 28 was the highest close since Sept. 11.