Alexandria, Virginia – Data released today by NATSO, the national association representing America’s travel plazas and truckstops, shows that 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 per cent in May as compared with last May 2007, and diesel gallons sold dropped twice as much that month, by about six per cent. Declines of demand for fuel greater than 2.5 per cent 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 more over the prior month for gasoline and an average of over 60 cents more for diesel, topping the US$4 mark for the first time ever.
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 US$10,000, now costs more than US$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.
NATSO is the professional association of America’s $42 billion travel plaza and truckstop industry.