Thursday, July 3, 2008

Rising Fuel Prices the Result of Speculation, Says Trade Group

Got any July 4th holiday driving plans? Well, according to one survey, gasoline and diesel demand has dropped and NATSO, the national association representing America's
travel plazas and truckstops, says that unregulated market speculation is driving gas prices higher. And that will affect each of us that plan a trip this holiday weekend with ever increasing gasoline and diesel prices.

"NATSO notes that with fewer people on the road, retailers have seen demand for fuel
drop. Demand for both gasoline and diesel dropped significantly in May, even while wholesale fuel prices (the cost of fuel that retailers pay) continued to climb."

"The number of gallons of gasoline sold fell nearly three percent in May as compared with last May 2007, and diesel gallons sold dropped twice as much that month, by about six percent. Declines of demand for fuel greater than 2.5 percent are rare, even more so in a time that is considered to be peak driving season."

"Despite these declines, during that same month gasoline and diesel wholesale prices surged. According to the Oil Price Information Service (OPIS), the average wholesale cost of fuel sold to retailers climbed throughout May and June. Retailers were paying an average 37 cents over the prior month for gasoline and an average of over 60 cents more for diesel, topping the $4 mark for the first time ever."

"NATSO adds that while consumers feel the squeeze of the higher prices, for fuel
retailers the surging price of fuel strains their credit lines and makes cash flow difficult to manage. A tanker truckload of diesel fuel, which a couple of years ago cost a little more than $10,000, now costs more than $32,000. Wholesale prices can increase as much as 10 to 15 cents in a single day, making it more challenging than ever to manage fuel inventories at travel plazas and gas stations."

So... you still planning any holiday travel? If so, post a comment. Let other Loudoun drivers know if the high price of fuel has grounded you.

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