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Is a fuel crisis coming in Europe??



 
 
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  #1  
Old March 16th, 2004, 12:03 PM
Earl Evleth
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Default Is a fuel crisis coming in Europe??

In Europe the prices rises in gasoline have been modified by
the fact the euro has risen in value. Top grade gasoline in
France now is running about 1.10 euros and summer is coming.

Will it go to 1.20 or higher???

But is a general problem on the near horizon?

The article below indicates a growing diesel problem in California,
they are special one's due to the blend. However -----.

Earl

****



Diesel Prices Are Bringing Some Trucks to a Standstill


By Elizabeth Douglass Times Staff Writer


His Peterbilt cab and 48-foot refrigerated Great Dane trailer aren't hauling
cheese from the Central Valley to Minnesota. The rig isn't delivering
groceries across the state or taking produce to market from California
fields.

Telles said he and his truck are staying home in Pinole, Calif., about 25
miles northeast of San Francisco, until diesel prices fall or freight rates
rise. "I won't haul," he said, "unless I can make a profit."

Diesel is often an afterthought when consumers and politicians are howling
over high gasoline prices. But right along with gasoline, diesel prices have
exploded throughout California in recent weeks. That has pushed up costs for
truckers like Telles, as well as for railroads, construction companies and
farmers, among others, and threatens the state's economic recovery.

For the first two months of the year, the average statewide retail price for
diesel rose more than 26 cents a gallon to $1.939, a jump of more than 15%,
according to figures from the Energy Information Administration, an arm of
the U.S. Energy Department. On March 8, the statewide average fell about a
penny, to $1.927, mirroring the slight pullback of gasoline prices.

Price surges for diesel have historically been less dramatic than for
gasoline in California. Experts warn that both fuel markets are destined to
see more volatility in the future.

"It's exactly the same situation for diesel as it is for gasoline," said
Claudia Chandler, assistant executive director of the California Energy
Commission.

For one thing, California diesel is ‹ like the gasoline here ‹ a special
blend that is cleaner, more expensive to make and unlike that used in other
states.

In addition, diesel production in the state comes from the same 13
refineries that produce California gasoline. The plants are working at
capacity and can't make enough of either fuel to satisfy growing demand in
California, Arizona and Nevada.

When refinery outages hit, they are just as likely to affect diesel
production as gasoline output. Companies can also opt to make less diesel to
maximize gasoline output, especially if profit margins are higher for
gasoline.

Making a bad situation worse, a Bakersfield refinery that Shell Oil Co.
plans to close Oct. 1 makes 6% of California's diesel fuel. Although Shell
has said it would honor its supply contracts, the overall reduction has
state officials nervous.

All this points to a rough road ahead.

"Almost everything you buy gets delivered by truck," said Mike Jackson,
director of transportation technology at Tiax, a consulting firm in
Cambridge, Mass. "So it can have a pretty big economic effect if the
truckers are put in a bind, where they can't increase their prices and their
costs go up."

Telles, for example, said fuel was costing him 36 cents a mile, on top of
other operating expenses that total 65 cents a mile. He recently turned down
a freight run that would have paid him $1 a mile.

Walt Unterseher, an owner-driver based in Carlsbad, Calif., passes on those
kinds of jobs, too. His flatbed trailer, which gets a maximum of 6.5 miles
per gallon, is parked.

"You can go into any truck stop and everybody is crying about the high cost
of fuel and low freight rates," Unterseher said. "There's always somebody
out there thinking, 'well, I've got to run,' but you can't run for nothing
forever, it's going to catch up to you."

A fuel surcharge can help, if you can find a customer to pay it. Unterseher
works for a company that instituted a fuel fee, but the company passes only
a portion of that on to the drivers who buy the diesel.

Farmers take a hit on high diesel prices too. As with many truckers, some of
California's farmers operate on thin margins, and profit can turn to loss
with sharp moves in commodity prices or bad weather.

Bill Crivelli, who processes tomatoes and grows cotton and alfalfa hay, said
he used as much as 20,000 gallons of diesel fuel a year, mostly to power his
10 tractors.

"It can be a big expense," he said. When the prices jump, "it reduces the
amount of profit you're going to have."

In recent years, farmers who have fuel storage tanks have tried to buy
diesel when prices were lower and hold it until it's time to rev up the
tractors for planting or harvest. Crivelli, whose 1,100-acre farm is in the
Central Valley town of Dos Palos, said he doesn't have any tanks. "I'm just
at the mercy of the market."

Storing fuel can help hedge against diesel price run-ups, but the strategy
can backfire too, said Chandler of the state energy commission.

"If there's one thing we're worried about with diesel, it's that there's
this huge reserve out there of empty tanks," Chandler said. "When they pull
supplies off the market, it ramps up the price, and it keeps the price up,
because it creates an artificial shortage-type situation, even though
there's not a supply shortage."

Crivelli said farmers are beginning to till their fields less often, which
lowers overhead costs, reduces time in the fields and cuts diesel
consumption.

"It reduces the number of trips with the tractor," he said. "That's really
catching on and spreading here. The price of diesel's a big part of that."

Farmers feel the pain another way too. If fuel prices get too high, it
becomes difficult to find enough truck drivers to haul the crops to market,
forcing farmers to compete for transport or offer higher freight fees.

If diesel prices don't drop a lot soon, Telles will be one of those
sought-after drivers.

"It's going to be very interesting to see what happens to those produce
farmers," Telles said. "I'm not hauling cheap freight and paying high diesel
prices. It'll rot in the field before I roll my truck."



  #2  
Old March 16th, 2004, 12:33 PM
Mxsmanic
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Default Is a fuel crisis coming in Europe??

I don't see any mention of Europe here.

--
Transpose hotmail and mxsmanic in my e-mail address to reach me directly.
  #3  
Old March 16th, 2004, 01:12 PM
The Reid
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Default Is a fuel crisis coming in Europe??

Following up to Earl Evleth

Walt Unterseher, an owner-driver based in Carlsbad, Calif., passes on those
kinds of jobs, too. His flatbed trailer, which gets a maximum of 6.5 miles
per gallon, is parked.

"You can go into any truck stop and everybody is crying about the high cost
of fuel and low freight rates," Unterseher said. "There's always somebody
out there thinking, 'well, I've got to run,' but you can't run for nothing
forever, it's going to catch up to you."


So fuel is dirt cheap but the truckers still get squeezed, isn't
that capitalism as US likes it? I think truckers in UK have same
problem, its nothing to do with price of diesel, rather the
oversupply of truckers overcompeting for work. Bush could treble
the price of diesel, (fat chance) and little would change in the
short term. Truckers would still be forced to work just at edge
of making a profit. In the medium term it might be less economic
to shift stuff around so much, so less truckers. Either way it
sounds like there are too many trucks.
--
Mike Reid
"Art is the lie that reveals the truth" P.Picasso
Walking, Wasdale, Thames path, London etc "http://www.fellwalk.co.uk" -- you can email us@ this site
Spain, food and walking "http://www.fell-walker.co.uk" -- dontuse@ all, it's a spamtrap
  #4  
Old March 16th, 2004, 01:39 PM
Mark Hewitt
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Default Is a fuel crisis coming in Europe??


"Earl Evleth" wrote in message
...

For the first two months of the year, the average statewide retail price

for
diesel rose more than 26 cents a gallon to $1.939, a jump of more than

15%,
according to figures from the Energy Information Administration, an arm of
the U.S. Energy Department. On March 8, the statewide average fell about a
penny, to $1.927, mirroring the slight pullback of gasoline prices.


Awww what a shame, I feel so sorry for them!

Try coming to the UK. Approx US$5.34 per US Gallon here.



  #5  
Old March 16th, 2004, 02:05 PM
Gregory Morrow
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Default Is a fuel crisis coming in Europe??


Mark Hewitt wrote:

"Earl Evleth" wrote in message
...

For the first two months of the year, the average statewide retail price

for
diesel rose more than 26 cents a gallon to $1.939, a jump of more than

15%,
according to figures from the Energy Information Administration, an arm

of
the U.S. Energy Department. On March 8, the statewide average fell about

a
penny, to $1.927, mirroring the slight pullback of gasoline prices.


Awww what a shame, I feel so sorry for them!

Try coming to the UK. Approx US$5.34 per US Gallon here.


Historically speaking, the price of petrol here in the States is still dirt
cheap. The average US price (per an article in today's paper) is now about
$1.70. That is about $0.26 per gallon at 1955 prices, $0.71 per gallon in
1980, etc. (inflation adjustment per http://www.westegg.com/inflation/ ).

Fuel is still *absurdly* cheap in the States, even if it goes up to more
than $2.50 or more per gallon....

--
Best
Greg


  #6  
Old March 16th, 2004, 02:15 PM
Owain
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Posts: n/a
Default Is a fuel crisis coming in Europe??

"Gregory Morrow" wrote
| Mark Hewitt wrote:
| "Earl Evleth" wrote
| For the first two months of the year, the average statewide retail
price
| for diesel rose more than 26 cents a gallon to $1.939,
| Awww what a shame, I feel so sorry for them!
| Try coming to the UK. Approx US$5.34 per US Gallon here.
| Fuel is still *absurdly* cheap in the States, even if it goes up to more
| than $2.50 or more per gallon....

They'll just have to drive smaller cars ... or even start walking down the
drive to the mailbox :-)

With such a low retail price, any wiggle in the wholesale price of oil is
going to have a bigger effect on retail price than it would in Europe. Also,
at least in UK, fuel for transport is heavily taxed/excised, so if a higher
oil price started to have an adverse effect on the economy, the government
does have leeway to compensate by foregoing some of the tax.

And farmers and other non-transport users get 'red' diesel which doesn't
have the excise tax, for use on farm machinery.

Owain


  #7  
Old March 16th, 2004, 02:49 PM
Markku Grönroos
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Default Is a fuel crisis coming in Europe??


"Gregory Morrow" wrote in
message nk.net...

Historically speaking, the price of petrol here in the States is still

dirt
cheap. The average US price (per an article in today's paper) is now

about
$1.70. That is about $0.26 per gallon at 1955 prices, $0.71 per gallon in
1980, etc. (inflation adjustment per http://www.westegg.com/inflation/ ).

Fuel is still *absurdly* cheap in the States, even if it goes up to more
than $2.50 or more per gallon....

How would you describe retail price in Indonesia where it is around 50 cents
a gallon ?


  #8  
Old March 16th, 2004, 03:11 PM
Earl Evleth
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Posts: n/a
Default Is a fuel crisis coming in Europe??

On 16/03/04 14:49, in article , "Markku
Grönroos" wrote:

How would you describe retail price in Indonesia where it is around 50 cents
a gallon ?



A political gift to placate the people. A barrel contains about 42 gallons
and if it were all gasoline that would yield at $0.50 a only about
$20 for the entire barrel.

But the oil can be sold for 30 dollars which means that gasoline should
not be under at least $1/gallon. It currently runs about $1.09 (unleaded) on
the financial markets.

So it sometimes happens that gasoline is sold at less than the market price
in some countries. Unfortunately it stimulates waste and unreasonable
expectations.

At one time, in the USSR, bread was so cheap, because it was subsidized,
that it was fed to pigs since it was cheaper than other pig food sources.

Earl



  #9  
Old March 16th, 2004, 03:24 PM
Gregory Morrow
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Posts: n/a
Default Is a fuel crisis coming in Europe??


Earl Evleth wrote:

On 16/03/04 14:49, in article , "Markku
Grönroos" wrote:

How would you describe retail price in Indonesia where it is around 50

cents
a gallon ?



A political gift to placate the people. A barrel contains about 42

gallons
and if it were all gasoline that would yield at $0.50 a only about
$20 for the entire barrel.

But the oil can be sold for 30 dollars which means that gasoline should
not be under at least $1/gallon. It currently runs about $1.09 (unleaded)

on
the financial markets.



Interesting chart US retail gas prices:

http://oregonstate.edu/Dept/pol_sci/fac/sahr/gasol.htm

--
Best
Greg


  #10  
Old March 16th, 2004, 03:49 PM
The Reid
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Posts: n/a
Default Is a fuel crisis coming in Europe??

Following up to Markku Grönroos

Fuel is still *absurdly* cheap in the States, even if it goes up to more
than $2.50 or more per gallon....

How would you describe retail price in Indonesia where it is around 50 cents
a gallon ?


how does that relate to the average wages?
--
Mike Reid
"Art is the lie that reveals the truth" P.Picasso
Walking, Wasdale, Thames path, London etc "http://www.fellwalk.co.uk" -- you can email us@ this site
Spain, food and walking "http://www.fell-walker.co.uk" -- dontuse@ all, it's a spamtrap
 




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