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World events push diesel toward $2-a-gallon mark

According to figures released by the Energy Department Feb. 17, the national average cost of diesel fuel per gallon rose to $1.704 from the previous week’s average price of $1.662.

Reportedly, $1.704 is the highest cost of diesel per gallon ever recorded by the EIA. The previous high was $1.67, recorded in October 2000.

Although the average national price of diesel began to level off in late 2002, actually declining from $1.46 per gallon in October to $1.40 in late December, international concerns have pushed prices higher again — inching them toward the $2 per gallon mark.

Contributing factors include Venezuela’s oil strike, the looming prospect of war with Iraq, high prices for crude oil and fears of terrorist activity at pipelines in Colombia.

In early February, suspected rebels attacked Colombia’s second-largest oil pipeline, detonating explosives near the town where U.S. Special Forces have initiated counterinsurgency training.

Some 70 U.S. Special Forces are deployed in two military bases in Aruaca province to train a Colombian brigade to defend the 110,000-barrel-per-day pipeline. The U.S. troops are not allowed to accompany Colombian forces into combat.

The blast immediately shut down pumping of the Cano Limon pipeline, which serves an oilfield operated by U.S. Occidental Petroleum Corp. It was the fourth attack on Cano Limon so far this year.

Early February prices unwanted benchmark
Meanwhile, for the first time in more than two years, the average price of diesel Feb. 10 hit the $1.80 mark in two regions of the country including: New England, where the price was $1.834; and in the Central Atlantic states, where the price that week came in at $1.801.

But that was topped by the new, record-setting prices reported Feb. 17. Those were: $1.851 in the Central Atlantic states; $1.885 in New England; $1.783 in California; $1.742 on the West Coast; $1.756 on the East Coast; $1.681 in the Midwest; $1.704 in the Lower Atlantic states; $1.67 on the Gulf Coast; and $1.638 in the Rocky Mountain Region.