Price of fuel not predictable
Doolittle says prices vary dramatically and quickly
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With gasoline and diesel prices concerning both farmers and residential consumers this fall, Dan Doolittle, President of the Doolittle Oil Company, says he doesn't have the answers for what the future looks like.
"When demand picks up, the prices go up each fall," said Doolittle. "We are starting out high. We have no idea what it's going to do, for example, it is down today. The products can go up or down .30 or .40 very quickly"
Doolittle said the best advice for farmers is to fill up when they can.
The Doolittle Oil Company has been in business since 1938, serving customers in both Webster City and Fort Dodge. Doolittle said that the Webster City market is primarily agriculture, which is seasonal, while the Fort Dodge market is more industrial.
"We do have some people who contract fuel," he said, "Everybody was pretty confident the price would come down, but it didn't work out that way."
Doolittle said the three terminals they get their fuel from are located in Clear Lake, Des Moines and Duncombe.
"A couple of our suppliers have warned us that there may be supply issues," he said
He explained that when everyone (farmers) is in the field at the same time, it constrains the amount of fuel available.
"We still try to follow what other competitors do, we do try to keep the cash flowing," he said.
The high cost of fuel impacts the oil company also,
"I try to run my inventories low too," he said, "I don't then have too much on hand when the price has to adjust."
Doolittle said the push to go all electric has impacted the refineries in the United States. "Our refineries in our country are all old, they are running as fast as they can."
The closest refineries are in Illinois, he said, but apparently they are having issues with power outages lately.
"When those big plants go off-line, it takes a long time to get them back up on-line."
But Doolittle said it's not just our problem
"It's not just here, the prices are going up all over the world," he said. "It doesn't help that Ukraine and Russia keep destroying their infrastructure."
He's hopeful that Saudi Arabia will be able to help with the demand over seas.
"It's a worldwide market," he said. "And inventories in the midwest are tight."
With the rains recently, farmers he reminded, are not ready to be in the field.
"It's early yet," he said.