Gasoline Prices Set New Record Highs

Jul. 12–Gasoline prices shattered the previous record high Monday after soaring more than 8 cents a gallon over the weekend, according to AAA statistics.

Bruce Bell, chairman of the Mid-Continent Oil and Gas Association of Oklahoma attributed the recent surge in both gasoline and diesel fuel to the recent climb in crude oil prices.

The price likely will continue to climb over the next few weeks, he said.

“There is such a long lag time between crude oil being purchased and refined that we are watching the results of the price of crude from a month to two months ago as opposed to what’s going on today,” he said. “The $60 oil we’ve experienced in the past two weeks has still not affected gasoline prices.”

AAA Oklahoma spokesman Chuck Mai, however, said he expects gasoline and diesel prices to fall in the near future.

“As far as I can figure out, the only new factor in the equation is the hurricane,” he said. “Nothing else is on the horizon that would cause prices to increase. The good news for consumers at least is that the price has to come down a bit as a result of Hurricane Dennis not being as bad as was feared.”

Dennis reached land at nearly the same location as last year’s Hurricane Ivan, which caused considerable damage to Gulf of Mexico oil and gas production. This week’s storm, however, apparently did not produce large waves and left the region’s energy industry largely unscathed.

The average nationwide price of a gallon of regular unleaded gasoline climbed to $2.29 Monday, up more than 6 cents over the weekend and 20 cents over the past six weeks.

In Oklahoma, the average price was $2.18, up more than 8 cents over the weekend and nearly a quarter since the end of May.

The Oklahoma City average price was nearly $2.17, up from nearly $2.09 Friday and $1.92 May 30. Tulsa drivers were paying an average of $2.20, up 9 cents over the weekend and 27 cents over the past six weeks.

The climbing costs are particularly damaging to the country’s trucking industry, which has seen its largest cost more than double over the past two years.

“It’s just going to lead to inflation because we’re going to have to continue to raise our rates and pass on a surcharge to our customers,” said Danny Christner, vice president and chief operating officer of Sapulpa’s John Christner Trucking. “Everything you consume or purchase has a freight cost built into it. Consumers don’t see that as much because it might be gradual inflation, but there are certain big-ticket items that are starting to publish a fuel surcharge.”

The nationwide average price for a gallon of diesel broke a 3-month-old record last week at nearly $2.39 a gallon and climbed to more than $2.44 over the weekend. The average in Oklahoma began setting record highs June 26 and jumped to more than $2.32 by Monday.

The average tractor-trailer holds about 300 gallons of fuel and gets about five miles per gallon. At that rate, truckers now are paying an average of about $730 for each tank of fuel that lasts about 900 miles. In California, where the cost has climbed to $2.68 a gallon, one tank will cost a driver about $800.

Monday’s national average for a gallon of diesel is $2.44, about 66 cents higher than the price one year ago. The increase translates into about $200 per tank.

Christner said his company lost about 10 percent of its customers who refused to pay the rapidly increasing fuel cost surcharge.

For smaller companies, however, the increase has made their routes less profitable, said Dan Case, executive director of the Oklahoma Trucking Association.

“Smaller companies mostly have contracts that are harder to put fuel surcharges into,” he said. “When you bid with the state, you bid a year ahead, so you have no idea what the fuel surcharge will be.”

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