The good news is that diesel prices have dropped steadily since mid-winter.

The not-so-good news for all petroleum-product consumers is that oil exporters appear determined to shore up prices.

According to figures provided by the federal Energy Information Agency (EIA), diesel prices had fallen for seven straight weeks by mid-March, hitting a national average of 139.2 cents per gallon. That's nine cents per gallon lower than the price recorded during the same period a year ago and the lowest level since May of last year. Falling prices are normal in the spring because demand for home heating oil drops off at the end of the heating season.

But that's where the good news ends. Members of the Organization for Petroleum Exporting Countries (OPEC), which control about 40 percent of the world's oil supply, have cut production twice this year by a total of 2.5 million barrels a day in an effort to keep prices between $22 and $28 per barrel. Under the quotas that took effect on April 1, the OPEC 10 (all OPEC members except Iraq) will produce 24.1 million barrels a day. (World demand for oil is about 78 million barrels a day.)

The OPEC production cuts come even as world oil stocks remain below expected levels, according to the EIA, which expects little improvement in oil stocks—and thus relatively high prices for petroleum products, through at least the end of 2002. The agency had forecast that prices would average about $26 per barrel this year, even before OPEC announced its second round of production cuts.

The high cost of fuel over the last two years has led most less-than-truckload carriers to impose fuel surcharges on rates, and many truckload carriers have attempted to increase rates as well. The volatile pricing led the Owner-Operator Independent Drivers Association to ask Congress to create a uniform method for imposing fuel surcharges. That proposal passed in the House of Representatives last year but died in the Senate.

The Bush administration immediately latched onto OPEC's production cuts as a reason to promote its effort to formulate a national energy policy. In response to OPEC's move, Energy Secretary Spencer Abraham said, "OPEC's decision ... demonstrates the importance of increasing America's domestic production and developing a national energy policy that will ensure a stable, reliable, affordable, and diverse supply of energy."

Editor's note: Readers can check the EIA's weekly update of diesel fuel prices, which shows both national and regional averages, on our Web site (logisticsmgmt.com).