Retailers Have Seen Demand for Fuel Drop
ST. LOUIS, MO, (PRNewswire-USNewswire), July 6, 2008 - Once again, high fuel prices dampened travel plans this holiday. More Americans stayed home this Fourth of July than last year, just as they did during the Memorial Day weekend.
With fewer people on the road, retailers have seen demand for fuel drop, according to data recently released by NATSO, a trade group representing the travel plaza industry.
Ask any economist what happens when a product's supply is ample but demand is lower, and you'll hear that the price of that product is likely to fall.
Not so with gasoline and diesel fuel this year, based on demand data released today by NATSO, the national association representing America's travel plazas and truckstops. 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 percent in May as compared with last May 2007, and diesel gallons sold dropped twice as much that month, by about six percent. Declines of demand for fuel greater than 2.5 percent 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 over the prior month for gasoline and an average of over 60 cents more for diesel, topping the $4 mark for the first time ever.
Softer demand and higher prices lends further support to experts who have pointed to unregulated market speculation as a significant culprit in higher fuel prices.
"In the past, when we've seen skyrocketing fuel prices like this, it is because of some crisis that squeezes supply," said president and CEO of NATSO Lisa Mullings. "We've seen no long lines at the pump; in fact, demand has fallen and supply is adequate, so it is clear that there is another factor driving up prices."
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 $10,000, now costs more than $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.
Missouri Provides $5 Million For Improved Amtrak Service from St. Louis to Kansas City
JEFFERSON CITY, MO, (SLFP.com), July 6, 2008 - Reliability of Kansas City to St. Louis trains operated by Amtrak for the Missouri Department of Transportation can improve, thanks to $5 million provided by the Missouri state legislature and approved by Gov. Matt Blunt to increase track capacity on the route.
The Missouri Mules (Trains 311, 313, 314 & 316) provide twice-daily round trips across the state and have been plagued by lengthy delays due to heavy freight traffic on the Union Pacific Railroad line.
"This is great news for Missouri," said MoDOT Director Pete Rahn. "This funding will lead to improved service, helping make Amtrak trains an even better travel alternative."
New track extensions, called sidings, will reduce bottlenecks between Kansas City and Jefferson City in west central Missouri. These parallel tracks can allow trains to pass each other without having to stop. In addition to the state appropriation, MoDOT is seeking an additional $5 million in federal matching funding from a new Federal Railroad Administration program.
"This marks a major change in Missouri's approach to passenger rail," Rahn added. "State-supported Amtrak service has been running between Kansas City and St. Louis since 1979 and each year legislators have budgeted only enough money to operate the trains; nothing to build improvements. This capital improvement funding shows a new level of commitment by our legislators to Amtrak service."
Missouri Senate Leader Mike Gibbons was instrumental in the legislative push to provide the additional funding.
"As gas prices continue to rise, Missourians need and deserve a reliable and affordable alternate mode of travel," he said. "This funding allows trains to pass without delay, relieves congestion and will improve on-time performance of passenger rail, meaning it will be a real option for travelers."
Improvements on the line could not be occurring at a better time. Ridership between Kansas City and St. Louis increased sharply in April and May, compared to the same period last year.
"Much of this route is a single set of tracks and Amtrak trains share the limited capacity with numerous freight trains," said Michael Franke, Amtrak Assistant Vice President - State Partnerships. "Investments in infrastructure have been sorely needed for passenger trains to operate more reliably between St. Louis and Kansas City.
"This capital funding is an important first step in addressing the capacity of this heavily-used corridor and such investments in the infrastructure will ultimately lead to improvements in train performance," Franke added.
A study of chokepoints on the route was completed in 2007 by the University of Missouri-Columbia and siding construction and extensions were found to have the most immediate prospect for service improvements.
"This study forms the basis of discussions with Union Pacific Railroad as to how the project will be implemented, and discussions with the railroad on how the project will take shape will begin in the next few weeks," said Brian Weiler, MoDOT Director of Multimodal Operations. "These improvements will also complement Union Pacific's own improvements near the chokepoints at the Gasconade and Osage rivers."
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