Diesel pinch hurting some in valley | VailDaily.com

Diesel pinch hurting some in valley

J.K. Perry
Shane Macomber/Vail DailyThe high diesel prices have increased the cost of other goods, like construction materials.

EAGLE COUNTY – A shortage in cleaner diesel, recently mandated by the federal government, is driving up fuel prices and causing costs to be passed on to those buying goods trucked into the county.”It significantly affects other industries,” said Stan Dempsey Jr., president of the Colorado Petroleum Association. “I think a lot of trucking customers would tell you the cost of shipping goods is higher.”Six months ago, the trucking company that delivers beds to Colorado Mattress Co. in Minturn tacked on a $5 surcharge to each mattress and box spring delivered, because of high diesel costs, owner Rob Rollins said. The trucking company recently told Rollins they felt they could charge more because diesel went up again.”It only hurts in the sense it’s a little bit taken out of your pocket,” Rollins said. “If it’s just that much for beds, I would think everything we’re buying is impacted in the same way.”Rollins said he is considering passing along the surcharge to customers, and he wonders if other businesses are doing the same.”Business owners will have to react,” he said. “The next drop of the shoe when prices go up is going to be a rude awakening.”Under a new Environmental Protection Agency regulation effective June 1, 80 percent of the diesel imported or produced by fuel companies is required to be cleaner-burning “ultra low sulfur diesel.”Over the past two years, Suncor Energy – which provides 35 percent of Colorado’s gas and fuel – modified its Commerce City refinery to meet the EPA regulation, according to Suncor’s Web site.The modifications meant portions of the refinery weren’t producing fuel at one time or another, creating shortages and higher demand that drove up costs at the pump, said Dempsey said.The Colorado diesel average in Colorado peaked at $3.32 per gallon in late August and dipped to $3.27 on Monday, according to AAA. The record high is $3.39, which occurred Oct. 22, 2005.Diesel supply should remain tight for the next month, then loosen as a decrease in gasoline consumption allows for more diesel to be made, Dempsey said.Whether prices at City Market reflect increased fuel prices is not known. Trail Daugherty, spokesman for King Soopers and City Market, refused to reveal the chain’s business strategy because the grocery industry is so competitive.But passing on fuel cost to customers would be “foolish,” he said.”You want to stay highly competitive with your competitors,” Daugherty said, adding City Market is cautious about passing fluctuations along to customers and instead tries to reduce expenses in other areas to compensate for increased fuel costs.In the past two years, the cost to deliver a semi loaded with stone from Oklahoma to CK Stone’s New Castle headquarters rose $150 to $200, said Roger Blackard, the company’s project manager. The jump forced CK Stone to slightly increase their price for stone, Blackard said.Motorists also pay increased diesel costs and some have been worried about fuel shortages. Calls to AAA Colorado increased when travelers became concerned about dwindling diesel supplies in other parts of the country, said Alexa Gromka, spokeswoman for Colorado AAA. “The best thing we can tell them is find their route and then contact that state’s AAA or oil and gas industry,” Gromka said, adding she suspects the concerns were unfounded when the travelers didn’t call back to report shortages.At least one state experienced a shortage. In late August, some Wyoming gas stations along Interstate 80 rationed sales of diesel fuel to 50 to 75 gallons per customer and in some cases turned pumps off, the Billings Gazette reported.Staff Writer J.K. Perry can be reached at 748-2928 or jkperry@vaildaily.com.Vail, Colorado

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