Gas, diesel prices bust all records

Spike worries businesses that will have to pass on costs to customers

Posted: Wednesday, August 17, 2005

Gasoline prices continue to hit all-time highs in Juneau and diesel prices have surpassed unleaded costs in some places.

Unleaded gas and diesel have climbed about 20 cents in the last three months. Gas started at $2.71 a gallon at the Douglas Depot on Tuesday, while the Taku Fleet Fuel station in Lemon Creek priced diesel at $2.68 a gallon.

"That's higher than I can remember," said Jeff Hansen, manager of Taku Oil Sales.

The spike continues to affect businesses that must decide whether to pass the cost on to the consumer.

Independent excavator Jerry Godkin's dump truck guzzles about five gallons per hour and he spends about $1,100 to $1,200 a month on diesel. In early April, diesel was at $2.49, he said.

"The prices have flip-flopped," Godkin said. "Diesel is higher than gasoline."

Seven years ago when he began his business, the only increase he said he worried about was for insurance.

Instead of charging a fuel surcharge like others in his line of work, he adjusts his rates along with the price of diesel. It's a good thing his customers aren't complaining, he said.

"They know as well as anybody that when they get fuel at the gas pump that it's been higher than before," Godkin said.

In the last two weeks, trucking and shipping company Alaska Marine Lines bumped up its fuel surcharge from 11 percent to 14 percent.

Kevin Anderson, vice president of sales in Seattle, said diesel is traditionally cheaper than unleaded gasoline; it was only 50 cents in January 2002.

"Who knows what's creating this?" Anderson said.

Alaska North Slope crude oil closed Monday at $63.52 per barrel. It broke the $60 crest for the first time Aug. 5 by jumping 93 cents from the day before.

In the global market, the price of crude oil Tuesday hovered beyond $66 per barrel, a slight dip from its peak at $67 on Friday.

Californians are paying the most in the Lower 48 at the pump with prices more than $3 a gallon in some places.

About a dozen refineries nationwide reported problems or unplanned shutdowns last week. Also, the U.S. Department of Energy reported declines in gasoline inventories. Industry experts say fears of Iran cutting back on production continues to fuel the bullish behavior of the market as well.

Hansen of Taku Oil Sales said in years past prices were expected to go up every summer and then taper off after Labor Day. But now Hansen says he can't predict when they will go down again.

Market diesel prices have fluctuated as much as 13 cents a day, he said. Hansen adjusts his prices with the markets in Seattle, where he buys the fuel every four weeks.

James Harris, owner of Juneau Taxi and Tours, said the increase is something he doesn't like to see, but his company will not have to increase rates until the price hits $3 a gallon.

Another taxicab company owner says when pump prices hit $2.75 a gallon, he may consider adjusting fares.

"We would have to do something," said Andrew Beattie, owner of Capital Cab.

The city allowed Juneau taxis to raise their rates by 90 cents in May due to rising gas prices. At the time, gasoline was around $2.50 a gallon.

Beattie said the increase hurts locals who take short, frequent trips the most.

Harris said if gas prices drop, he wants to reduce the fares.

"Hopefully gas prices will go down after Labor Day," he said.

• Andrew Petty can be reached at andrew.petty@juneauempire.com



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