Diesel prices level off; severed pipeline disrupts supply near Nashville

| 8/18/2006

Although nationwide the average price for a gallon of diesel is still about 50 cents higher than it was a year ago, the price of fuel appeared to be leveling off at the end of this week, even out West.

After two weeks of continually rising diesel prices, Colorado and Kansas prices actually slipped a bit overnight with ProMiles reporting their per-gallon averages at $3.347 and $3.285 respectively. That was down about half a penny in Colorado and about a cent and a half in Kansas.

Nationwide the average was $3.094 per gallon Friday according to ProMiles, down from $3.099 on Thursday.

Supply disruptions have been blamed for the increasing prices this month out West, where some fuel stops in Wyoming, Idaho, Colorado and Nebraska have temporarily run out of diesel while waiting on delayed deliveries. Some stations were limiting customers to 50 or 75 gallons per purchase earlier this month.

The supply woes in the West have been blamed on the switch to ultra-low sulfur diesel, an increased farm demand for diesel to power irrigation equipment and fighting in the Middle East.

Supplies to the other half of the country faced a minor disruption Thursday when a contractor working in Nashville, TN, cut through an 8-inch pipeline that provides diesel for that region. A spokesman for Colonial Pipeline Co. told The Tennessean newspaper that the line was shut down for much of Thursday.

The 5,500-mile-long pipeline serves the Southeast and the Eastern seaboard, but the spokesman said repairs would likely be quick and terminals should have enough diesel on hand to avoid any serious supply problems.