Don't use other pin pullers, You could get hurt! 
Friday, February 25, 2005
High Diesel Costs Siphoning Cash from Truck Drivers
Feb. 24--Keith Douglas can't wait to get out of the Pacific Northwest.
He just can't afford it.
"There ain't no sense in it," the Florida-based independent trucker fumed as he filled his tank with $2.72-per-gallon diesel at the Broadway Flying J Truck Plaza in Pasco. "If this keeps up for another six months, I'll be out of business."
Across the Northwest, diesel prices have skyrocketed in the past month, and analysts say it could be weeks before they settle down.
In Washington, the average price for a gallon of diesel stood at $2.55 Wednesday, up 44 cents from a month ago and up a shocking 77 cents, or 43 percent, from the $1.78 recorded in late February 2004, according to AAA.
Every day this week, diesel prices have been rising across the state and in the Tri-Cities, which showed an average price of $2.45 a gallon Monday, $2.51 on Tuesday and $2.52 on Wednesday -- up from $2.08 in late January.
Douglas, carrying a load of Washington apples and potatoes bound for Florida, compared those costs with the $2.26 per gallon in Caldwell, Idaho, the $1.83 per gallon in Cheyenne, Wyo., and the $1.86 per gallon in Greenwood, La., he paid on his most recent run.
"My break-even point, it's hard for me to make it over $2 a gallon," he said. "I've eliminated every other cost I can."
He might want to stay out of the Northwest for a while. Oregon and Idaho have shown similar diesel price spikes in the past month, and California and Nevada are beginning to see the effects of the region-wide shortage, said Jacob Bournazian, an economist with the U.S. Department of Energy's Energy Information Administration.
Rising crude oil prices, seasonal refinery maintenance shutdowns and a fire-caused slowdown at a major Canadian diesel supplier are all potential causes for the price spike, he said.
"High crude oil prices are contributing," he said, because they make up about half of the cost of a gallon of diesel. Crude oil for March delivery jumped to $51.15 a barrel Tuesday in New York, up $2.80 from Friday in the fastest one-day jump since October 2000.
Then there was the demand for home heating oil, which comes from the same general refining process as diesel, and seasonal maintenance in California refineries, he said.
Another possible factor was the early January slowdown of a major supplier of Canadian diesel -- Suncor, which suffered a fire at its Fort McMurray, Alberta, oil sands operation that cut its oil production in half, according to a company statement.
"The other thing they produce is diesel," said Ted Stoner, the Calgary-based western division vice president for the Canadian Petroleum Products Institute, an industry trade group. "Consequently, there's a fairly sizable chunk of diesel production that's disappeared out of the marketplace."
That led to a supply shortage and higher wholesale diesel prices in Western Canada -- and that market is closely tied to the diesel market for California and the Northwest, he said.
At the same time, America's demand for diesel is increasing, up an average of 3.5 percent to 5 percent in the past two months compared with the same period in 2004, Bournazian said.
And, "the West Coast has its own internal supply and distribution system," he said. "It runs on a much tighter supply and demand balance."
On the plus side, "this supply disruption is temporary," he said. As high prices draw fuel from other parts of the country and international suppliers, Bournazian expected the price would subside.
But those shipments take from three to five days from California ports, to one week from Texas and Louisiana ports, to up to three weeks from Asian ports.
Trucker Tim Horton, who was also fueling his company-owned truck at Pasco's Flying J on Wednesday, doesn't pay directly for his diesel.
"But it hurts the company, big time," he said. "When we find cheap fuel, we max it out, fill it as full as possible."
Horton agreed with Douglas that high fuel prices of the past year have hurt truckers -- and that rising fuel costs end up driving up the price of consumer goods across the board.
"I know a few (truckers) who had to let go of their trucks because of the (rising diesel) prices," he said. "That's why I don't own my own truck."
-----
He just can't afford it.
"There ain't no sense in it," the Florida-based independent trucker fumed as he filled his tank with $2.72-per-gallon diesel at the Broadway Flying J Truck Plaza in Pasco. "If this keeps up for another six months, I'll be out of business."
Across the Northwest, diesel prices have skyrocketed in the past month, and analysts say it could be weeks before they settle down.
In Washington, the average price for a gallon of diesel stood at $2.55 Wednesday, up 44 cents from a month ago and up a shocking 77 cents, or 43 percent, from the $1.78 recorded in late February 2004, according to AAA.
Every day this week, diesel prices have been rising across the state and in the Tri-Cities, which showed an average price of $2.45 a gallon Monday, $2.51 on Tuesday and $2.52 on Wednesday -- up from $2.08 in late January.
Douglas, carrying a load of Washington apples and potatoes bound for Florida, compared those costs with the $2.26 per gallon in Caldwell, Idaho, the $1.83 per gallon in Cheyenne, Wyo., and the $1.86 per gallon in Greenwood, La., he paid on his most recent run.
"My break-even point, it's hard for me to make it over $2 a gallon," he said. "I've eliminated every other cost I can."
He might want to stay out of the Northwest for a while. Oregon and Idaho have shown similar diesel price spikes in the past month, and California and Nevada are beginning to see the effects of the region-wide shortage, said Jacob Bournazian, an economist with the U.S. Department of Energy's Energy Information Administration.
Rising crude oil prices, seasonal refinery maintenance shutdowns and a fire-caused slowdown at a major Canadian diesel supplier are all potential causes for the price spike, he said.
"High crude oil prices are contributing," he said, because they make up about half of the cost of a gallon of diesel. Crude oil for March delivery jumped to $51.15 a barrel Tuesday in New York, up $2.80 from Friday in the fastest one-day jump since October 2000.
Then there was the demand for home heating oil, which comes from the same general refining process as diesel, and seasonal maintenance in California refineries, he said.
Another possible factor was the early January slowdown of a major supplier of Canadian diesel -- Suncor, which suffered a fire at its Fort McMurray, Alberta, oil sands operation that cut its oil production in half, according to a company statement.
"The other thing they produce is diesel," said Ted Stoner, the Calgary-based western division vice president for the Canadian Petroleum Products Institute, an industry trade group. "Consequently, there's a fairly sizable chunk of diesel production that's disappeared out of the marketplace."
That led to a supply shortage and higher wholesale diesel prices in Western Canada -- and that market is closely tied to the diesel market for California and the Northwest, he said.
At the same time, America's demand for diesel is increasing, up an average of 3.5 percent to 5 percent in the past two months compared with the same period in 2004, Bournazian said.
And, "the West Coast has its own internal supply and distribution system," he said. "It runs on a much tighter supply and demand balance."
On the plus side, "this supply disruption is temporary," he said. As high prices draw fuel from other parts of the country and international suppliers, Bournazian expected the price would subside.
But those shipments take from three to five days from California ports, to one week from Texas and Louisiana ports, to up to three weeks from Asian ports.
Trucker Tim Horton, who was also fueling his company-owned truck at Pasco's Flying J on Wednesday, doesn't pay directly for his diesel.
"But it hurts the company, big time," he said. "When we find cheap fuel, we max it out, fill it as full as possible."
Horton agreed with Douglas that high fuel prices of the past year have hurt truckers -- and that rising fuel costs end up driving up the price of consumer goods across the board.
"I know a few (truckers) who had to let go of their trucks because of the (rising diesel) prices," he said. "That's why I don't own my own truck."
-----
