AP - Volatile prices painful to truckers..........

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Posted on Sun, Oct. 23, 2005
Volatile prices painful to truckers, diesel industry


Associated Press

YANKTON, S.D. - The diesel fuel industry and its customers are feeling the pain as diesel fuel prices fluctuate without warning.

"Yesterday, I took a load of fuel to a dealer, and from yesterday's price when they bought the load, to today, it dropped 49 cents," said Gillas Stern, owner of the Stern Oil Company. "How does a dealer recapture that?"

According to Ron Planting, an economist at the American Petroleum Institute in Washington, factors such as high demand and devastating weather have caused excessive price fluctuations.

"Two things are relevant," he said. "We've had pretty strong demand for diesel relative to gasoline, and that's been going on for some time. Last year, demand for diesel grew 6.2 percent, while demand for gasoline grew 1.9 percent."

The average price of diesel in Yankton on Thursday was $3.39 a gallon, compared to $2.35 for regular unleaded gasoline.

But not long ago, diesel fuel cost considerably less per gallon than gasoline, increasing demand and making it a hot money-saving alternative.

Planting said fuel refiners have tilted toward more production of diesel this year, but not enough to make a noticeable change.

"They've been trying to produce more, but with the strong demand and the hurricanes, I think that may be leading to the fluctuations in price," he said.

Stern, with Stern Oil Co., said supply occasionally has been an issue, but not an overriding one.

"You might have a terminal that runs out of a particular product, but then they get it in again a few days later," he said.

The impact on the trucking industry have been tremendous, said Dave Rehurek, representative for the American Trucking Association and transportation manager for Alcoa's Yankton location.

He said the ATA calculates the trucking industry will spend $23 billion more on fuel this year, a total of $85 billion, making fuel the highest operation cost in the industry and forcing owners to ask drivers to fuel up more efficiently.

In the meantime, the trucking and diesel industries must deal with the frustrating fluctuations.

"Even though these are some of the busiest times that have ever been experienced in the industry through the resurgence of the economy, it's very difficult," Rehurek said. "We've never seen this kind of fluctuation in fuel pricing."

In Nebraska, the shortage is a little more severe.

Four out of the state's 10 diesel terminals have run dry, leading Gov. Dave Heineman to ask the U.S. Environmental Protection Agency for a waiver to allow the sale and use of high-sulfur content diesel fuel.


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Information from: Yankton Press and Dakotan, http://www.pressanddakotan.com/





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