Planes and jobs fall as fuel costs rise: week ending June 7
It wasn’t just about drivers this week.
Massive increases in fuel costs meant about 4,000 jobs were slashed in the airline industry this week when Continental Airlines and United Airlines announced cutbacks.
Continental said 67 planes would be grounded; United Airlines planned to ground 70 planes and shut-down its budget airline, Ted.
Rising fuel costs have meant additional fees and higher prices for travelers; nearly all low-cost airlines have filed for bankruptcy protection while industry giants reduce staff and schedule capacity, ground planes and stamp extra fees onto consumers’ tickets.
On the ground, the picture this week was just as grim.
As of June 4, a barrel of crude was up a slick $62.26 from last year but down $4.23 from the previous week.
That meager drop in price has done nothing to relieve the dollars at the pump, as oil margins continue their tight yo-yo, challenging records nearly every week. The national average for a gallon of regular unleaded once again hit a record high on June 5, posting $3.989 a gallon. That’s more than 80 cents higher than this time last year.
Diesel fuel price hikes paint a seeming unending climb above 2006-2007 averages. This week, diesel’s $4.70 a gallon was nearly $2 higher than the same time last year.
What’s changing?
For diesel, a change in the refining requirements made producing the fuel more costly, among other things.
Fuel marketers are quick to point to speculators as the enemy, however; in fact, concerns about the U.S. demand peaking and causing a world-wide shortage within five years sent traders running for supply mid-2007. But the paper trading hasn’t slowed, despite a nationwide decrease in consumption of nearly 1 percent for the beginning of 2008, according to the Petroleum Marketers Association of America.
Legislators are beginning to take notice. It’s hard not to; gas affects every red-blooded driver – and voter - in the United States.
Keep watching www.gaspriceslive.com for more information on price changes, proposed legislation, economic fallout and, ultimately, to keep tabs on the price of a gallon of gas in your area.
Reach Crystal Reid at creid@gaspriceslive.com
