Exxon Mobil chairman Rex Tillerson said oil companies do not meet and conspire to illegally manipulate oil prices. Appearing this morning, May 3 on NBC’s “Today” show, Tillerson said that he understands gas prices are causing difficulties for people, but the alternative of no gas or long lines isn’t attractive either.
Politicians and the public are looking for ways to deal with rising gas prices; trucking companies are facing similar problems as they deliver their goods. Dominic Valente, the owner of a New York-based food distribution company, told viewers he’s passing on the costs to his customers, but added they seem to understand.
Tillerson pointed out that the price of oil is set on the open commodities market, and the price at the pump eventually reflects that. Sen. Kay Bailey Hutchison (R-Texas), who also appeared on “Today,” said the government must encourage alternate sources of energy besides oil.
The American Trucking Associations recently revised the trucking industry’s 2006 fuel costs, projecting an increase in the amount it will spend on fuel in 2006. ATA said the trucking industry will spend $94.3 billion on fuel this year, based on current fuel price forecasts. This marks a $6.6 billion increase over the $87.7 billion spent by trucking in 2005.
ATA President and Chief Executive Officer Bill Graves said the trucking industry currently is experiencing the highest fuel prices in history. For many motor carriers, fuel represents the second-highest operating expense, accounting for as much as 25 percent of total operating costs. “An affordable supply of diesel fuel is imperative to keep our trucks moving,” Graves said. “Fleets must be guaranteed sustainable operating costs in order to continue delivering everything that is delivered by truck.”
ATA said fuel prices could increase further in 2006 because of the introduction of ultra-low-sulfur diesel, which is scheduled to hit the market mid-year. ULSD costs more to refine and distribute than today’s diesel fuel, which could place additional upward pressure on the price of diesel fuel.
The national average retail price of a gallon of diesel increased 2 cents for the week ending Monday, May 1 to $2.896. That increase was much smaller than the 11-cent increases of the previous two weeks, but it still left diesel costing 63 cents more than in the same week of 2005. The price now has increased five weeks in a row.
For the week ending May 1, the average diesel price increased in every region tracked by the U.S. Department of Energy, except for the Lower Atlantic, where the price was unchanged. The biggest increase was in the Rockies, at 10.9 cents. The West Coast had the most expensive diesel in the country at $3.098. In California, the average was even higher, at $3.163. The least expensive diesel in the country was on the Gulf Coast, at $2.832.
For state-by-state diesel prices, updated daily, visit http://www.etrucker.com/apps/promiles/fuelprices.asp.