Diesel hits truck owners in the wallet

By Lauren Radomski (Contact) | The Daily Journal

Published Thursday, April 3, 2008

Photo by Lauren Radomski

Diesel prices reached $3.87 a gallon Wednesday in Fergus Falls.

Roger Lewis remembers how much it cost him to run his snowplow last winter. For 60 gallons of diesel — the approximate amount for a day of plowing — Lewis paid just over $100.

But when the Otter Tail County driver put the same amount in his truck Wednesday, it left him out $215.

Don Larson, a fellow driver who joined Lewis at Big Chief Truck Stop, said the rising cost of diesel ultimately affects how much the county can spend on construction and maintenance projects.

“Things like snowplowing they have to go out and do,” Larson said. “This year we’ve probably had less snowplowing than other winters, so we’re lucky there.”

The nationwide average for a cost of diesel is $3.96, up $1.17 from a year ago, says the Energy Information Administration (EIA), a government agency that provides energy statistics. In the Midwest, the price of diesel rose from $3.95 March 17 to $3.96 a week later before falling to $3.92 Monday.

It may be hard to believe, but the cost of diesel has historically been lower than of gasoline. It wasn’t until September 2004, the EIA reports, that the price of diesel started to surpass gasoline year-round. A number of factors contribute to this phenomenon: increased demand worldwide, the transition to low-sulfur diesel, and a federal excise tax that’s six cents higher per gallon for diesel than gasoline.

And that means rising costs for businesses like Kane Transport, Inc., a petroleum carrier out of Sauk Centre. Driver Matt Primus said there’s not much the company can do other than try to conserve fuel as best it can.

“Drive slower and accelerate slower and just take your time,” he said.

Rising diesel prices also affect the equipment fund all Fergus Falls city departments contribute to for use and maintenance of refuse trucks, snowplows and other equipment.

Video

Diesel trucks filling up at Big Chief. Watch »

“We buy our fuel in bulk and buy at better prices than you’d see at the pump, but rising prices affect us, too,” said Russ Bye, fleet and facility manager.

Going overbudget in light of fuel costs may not have immediate consequences, Bye said, but the city will have to address those shortfalls at some point.

“If we go over every year, that money still comes out of the bottom line and will affect it long-term,” he said. “We’re still staying in line and I don’t anticipate any rate increases in the near future, but in the long-term it’s hard to say.”