Question-and-Answer Session
Operator
Yes. The question-and-answer session will be conducted electronically. (Operator instructions) We will go to Ben Brownlow of Morgan Keegan.
Ben Brownlow – Morgan Keegan
Good morning. Can you guys talk about – and I'm sorry if you've gone already over this. I kind of missed the beginning of the call. But can you talk about fuel demand versus fuel margins, and kind of the trade-off there?
Tom O'Brien
Sure. I think the major thing that we are seeing in fuel demand is conservation. I think that if you look at industry reports month-over-month, it appears that things that have historically been relevant metrics, like tonnage or miles, are actually trending slightly positive, but folks focused on conservation have, I think, really put an awful lot of a dent in the way that fuel has been – I should say the amount of fuel that's demanded and that goes certainly on the diesel side. On the gasoline side, being on interstate, I think that the high prices of gas really have curbed demand for gas. People are – because they don't do it the same way as trucking companies do – but they are taking shorter trips, forgoing vacations, that sort of thing because of the high price of fuel. At this point, it's very expensive to get lost; you don't want to make a wrong turn. Those are the kinds of things that people think about. And I think that's the major impact of what we are seeing in terms of demand.
Now, there is obviously competition on the diesel side for sure, and I'm not just talking about the headline price, or the posted price. We've been very, very close to our historical protocols in terms of retail pricing, relative to our competitors in the local markets. In fact, I've been very pleased with the way that we've been able to remain right in the mix in lots and lots of markets. There are certainly other forms of competition for fleet business, and that's on a national level. We've been competitive, I think as competitive as we have been in the past. Certainly, there have been instances where I think – let's put it this way, we have been selective in bidding new business with fleets and taking a more wholesome – fulsome, I should say, look at the relationships that we have, whether they be fuel only, fuel and shop, and really trying to bring up suites of services to our fleets and some appreciate that; some understand the benefits or see the benefits of that, and for some, that's not a benefit. And so, if there is some low, low-margin business in this environment, to me, it doesn't make sense. Let's say I was earning $0.06 a gallon when diesel was a dollar. It doesn't make any sense to me to earn $0.06 a gallon when I have to pay $4 to put it in the ground. And so, those have been conscious decisions to try to take into account all of our different business relationships, our cost of capital, working capital, and all of those things. I hope that answers your question.
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