What's going on here?
It's mid-April. The heavy home heating season is behind us. Diesel fuel prices are supposed to be retreating.
So, how come they aren't?
How come the national average price of diesel rose again in early April?
Oil industry analysts point to a plethora of reasons: High crude oil prices, modest fuel inventories, reduced refinery output, higher costs for transporting fuel, and increasing demand resulting from a strengthening economy. Doubtless there are other, less obvious, reasons.
Whatever the cause, motorcoach operators are paying anywhere from a penny a gallon more than they were a year ago, to 32 cents per gallon more if they operate in California.
The national average price of diesel was almost $1.65 per gallon at the end of the first week of April. A year ago, the national average price was just over $1.55 a gallon.
Regionally, the price of diesel ranges from a low of $1.59 a gallon on the Gulf Coast, to a high of $2.01 in California. In the first week of April, the price of diesel in California shot up more than 12 cents a gallon. Unbelievable.
Price increases in other parts of the country were much more modest by comparison. Prices rose slightly in lower Atlantic and Gulf Coast states, and by over a penny a gallon in the Rocky Mountain region.
Several areas of the country saw slight price decreases early this month. There were fraction-of-a-cent reductions along the East Coast, and in the Midwest.
The long-term outlook for diesel fuel prices is not encouraging, according to a story in The Wall Street Journal. The business-financial newspaper reported that global demand is straining the world's ability to produce and deliver crude oil and gasoline.
The story pointed out that strong demand growth in the United States, China and other nations is bringing the oil industry closer to the limits of its ability to supply, refine and transport oil.
The world is consuming about 80 million barrels a day of oil, with unused production capacity of about 2.5 million barrels a day, the cushion against supply shocks.
Meanwhile, the world's ability to refine crude oil into gasoline is also growing tight, the Journal said. Estimates show that spare oil-refining capacity has narrowed markedly since January 1999, when global capacity showed a surplus over demand of 5.7 million barrels a day.
In addition, transporting crude oil has become more expensive, and officials said the high cost of transport accounts for the increasing premium being paid for oil.
Gasoline prices already are at record levels, averaging nearly $1.80 per gallon nationwide.