State prices for diesel, regular gas set records

By Brent Hopkins Staff Writer

Prices for regular gas and diesel fuel have hit record levels in California and show little sign of noticeable relief, analysts said Tuesday.

The average price in the L.A. market for diesel fuel is $1.9889 per gallon, up from $1.7027 last month, according to the Automobile Club of Southern California. This increase has put a stranglehold on truckers, who can spend as much as $600 with each fill up.

The price of fuel is running guys out of business, said Eugene Green III, a long-haul trucker for Eagle Motor Freight out of Alabama.

The price of regular unleaded gas has also hit record levels, though its increase over the last month hasnt been as dramatic as the jump in diesel prices. AAA said the average price of regular unleaded gas in California has hit a high of $1.85. In the Los Angeles-Long Beach area, customers are shelling out $1.70 on average, thanks to a 12-cent-a-gallon jump in the last month.

Relief wont come until later this fall, according to the California Energy Commission. As the harvesting season comes to an end, the agricultural sector will place less demand on the market, spokesman Rob Schlichting said. Additionally, refinery problems that held up production are starting to be corrected.

The good news is that for last week, production was 177,700 barrels a day, 15 percent more than the week before, Schlichting said. Theyre starting to crank out more of the product, which should bring the price down.

Energy officials say some buyers have resorted to hoarding diesel in an attempt to avoid future price hikes, which could drain supplies to very low levels.

Id say its a major crisis, said Bob van der Valk, fuel supply and marketing manager for Cosby Oil, a fuel wholesaler in Santa Fe Springs. We may even run out of diesel.

Others in the oil business arent as grim.

The industry has done a pretty good job of supplying the demand, though with increased cost, said Jim Huccaby, national pricing manager for Chevron.

This increased price is a result of three factors. The $35.50 per barrel price of crude oil, up $7 from a month ago, has driven wholesale prices up. Second, West Coast refinery problems have plagued the industry in recent months and reduced supply.

Finally, increased reliance upon diesel plants for power production in summer months further increased demand.

While rising gas prices caused widespread alarm among motorists, the impact of diesels price hike has been less noticeable, van der Valk said.

When the gas shot up to $2, everybody wanted me to comment, he said. With diesel, there hasnt been even a whimper.

This hasnt been the case in Europe, where widespread outrage over high fuel prices has spawned numerous protests. Truckers, tour-operators and agricultural users have demonstrated both in the United Kingdom and on the continent.

In the United States, truckers have yet to fight back against the high prices. Instead, they just suffer in silence, hoping that the cost will go back to reasonable levels.

In Castaic, where big rigs outnumber cars and diesel is the lifeblood of drivers passing through on their way across the country, emotions run high on the subject. Awaiting a load of produce, Green frowned at the $2.03 per-gallon posted rates.

I dont fill up here anymore, I try to have enough fuel so I can get in, then get the hell out of California, he said.

For independent drivers without corporate credit cards to bankroll their diesel expenditures, the rise is nothing short of catastrophic. With two 150-gallon tanks to fill up for long distance runs, independent drivers take a $600 hit each time they head out on the road.

Edward Salmeron, operating his own rig out of La Habra, said that the high price for fuel has him fighting for his livelihood.

Right now, its a battle, he said, cleaning off his hub cabs while waiting for the his tank to fill. If it gets worse, I can try to raise the rates a little bit, but it wont really help.

If the high cost of transportation, which has also hit air carriers and railroads, continues, it will likely appear in higher prices for the goods shipped.

You probably wont notice it, but youll see anybody who relies on transportation to pass it on in price increases, said Jack Kyser, senior economist for the Los Angeles Economic Development Corp.

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-- Martin Thompson (mthom1927@aol.com), September 13, 2000