PENDLETON - After a Pendleton Grain Growers fuel delivery driver pumps diesel, unleaded gasoline or stove oil into a customer's tank, the resulting bill depends on the current price for the product at PGG's supplier.
"We don't have any control over it," said Bryan Bailey, PGG's petroleum manager. "The prices are set by the major oil companies, so we either buy it, or we don't."
And buy it, he does - sometimes as much as 60,000 gallons (about six tanker loads) at a time. Where he buys it depends on the price. PGG sometimes purchases fuel at the Tidewater Holdings Inc. terminal at Pasco, but also trucks petroleum products from Portland and Umatilla; Spokane, Moses Lake and Vancouver, Wash., and Boise, Idaho.
"Surprisingly, most of our gas comes out of Portland," he said, adding that PGG has no transporters of its own, but relies on contracted tankers to deliver to its three bulk plants.
Most of PGG's diesel comes from Tidewater's Umatilla terminal and from Pasco, but when the locks on the Columbia River dams are closed, prices at the terminals go up, so it's cheaper to truck products from Portland.
"We're not a branded company. We can buy from whoever has the best price that day," Bailey said, noting that fuel prices are so volatile nowadays that "the price they shoot you in the morning could be different three hours later."
Usually the fuel he orders in the morning is delivered later that day, he said, so his prices - and those he charges PGG customers - are current.
With the area's wheat harvest in full swing, diesel is a hot commodity these days. In winter, PGG trucks spend more time delivering heating fuel, although stove oil volume has been down considerably in recent years because fewer homes have oil-burning heating appliances.
"Ten to 12 years ago, in winter around the area, we could hardly keep up with five fuel-delivery trucks," Bailey said. "Now, it's almost a slow time."
Because he's in charge of petroleum purchases and sales, Bailey admits he's a bit of a news junkie, scanning the Internet regularly for news that might result in price changes. He needs to be ready to order now if he senses that prices might be going up, or holding off on a purchase if he thinks prices might fall.
The Puget Sound area of Washington has three oil refineries, he said. Bailey follows their production, as well as monitoring crude oil prices. Crude for September delivery was selling for $42.75 per barrel late last week on U.S. commodity markets. A barrel contains 42 gallons, so that put the crude price at more than $1 per gallon.
"Refinery outages - that's big," Bailey said, scanning an industry-related Web page on the computer in his Dorion Avenue office. "But really, anything to do with oil supplies - even if it has to do with Iraq - just as some supply disruptions in this area, the West Coast, will affect prices."