Consumers are starting to see a bit of relief at the gas pumps, but businesses that rely heavily on diesel fuel are still scrambling to keep up with increased prices.
While gas prices have dropped about 27 percent since their high in mid-June, diesel prices have been reduced by only 10 percent. Diesel fuel prices remain about 50 percent higher than in August 2021.
According to the GasBuddy app, which shows current area gas prices, as of Thursday afternoon, prices in Augusta trended at $2.93 per gallon, with a few outliers higher and lower. That’s significantly lower than the more than $4.50 a gallon drivers paid as recently as June. AAA shows the current national average is $3.68 per gallon, down from a high of $5.02.
This decline doesn’t surprise Marty Koger, CEO of MarKo Petroleum. Koger previously owned several BP stations, and his company now hauls ethanol, a fuel that’s added to gas. He said the price of crude oil, which is traded on the stock market, affects the price of gas.
“The price of gasoline goes up and down; it always has and always will,” Koger said. “It’s set at 6 p.m. every day.”
Although many people believe prices are controlled by the federal government, specifically the president, Koger said that’s not the case. Instead, they’re controlled by supply and demand.
“There’s more supply than there is demand, so prices come down,” Koger said. “Right now, there’s a lot of oil.”
Trucking companies continue to struggle
But companies that rely primarily on diesel fuel are having a rough time keeping trucks filled and still turning a profit.
Matt Russo, vice president of family-owned Palmetto Diesel, Towing and Recovery in North Augusta, said his company spent $300,000 more in fuel in the first four months of 2022 than it had in a comparable period in 2021.
“This year is our hardest year in business,” Russo said of the 10-year-old company. “Out profit margin is much smaller.”
The U.S. average price for diesel is $5.01. Locally, as of Thursday afternoon, it sold for around $4.41 per gallon, although one station still showed $5.09 on its sign.
Palmetto Diesel runs a fleet of 37 trucks that deliver goods throughout the Southeast. Although freight rates have increased, Russo said it hasn’t been enough to offset the fuel costs.
Russo said he’s heard other companies of comparable size have had to shut their doors but because the family has income from another business they’ve invested the profits they make at Palmetto Diesel back into the company.
“That’s the only thing that’s keeping us going,” he said.
So far Palmetto has relied on its truckers finding filling stations with good diesel rates but Russo recently invested in a fuel tank and plans to stock bulk fuel for his trucks. He said he can save 15-45 cents per gallon that way. His trucks average 58,000 gallons per month, so that’s considerable savings.
But Russo said his father, who is the dispatcher for the company, thinks diesel prices could soon begin to decrease on pace with gas prices.
“He thinks we’re on the top side of the hill,” Russo said. “I hope some of the other prices level out as well, like machinery. We can’t purchase any new equipment because it’s so expensive.”
U.S. has access to plenty of oil
Koger said this country is fortunate to have several oil-producing states, such as Texas, Oklahoma and Alaska. Most of the oil we use comes from the United States, Canada and Mexico, with only small quantities coming from Russia and Saudi Arabia.
Koger said Gov. Brian Kemp’s gas tax suspension has contributed to lower gas prices in Georgia. Kemp has extended the suspension three times, which saves drivers 29.1 cents per gallon. The current order is scheduled to expire on Oct. 12.
Of course, Koger can’t predict how much longer gas prices will continue to decrease.
“Only if the supply goes up, and the demand goes down,” he said.