Drivers

Diesel Prices Jump Nearly 23 Cents; National Attention on Plight of Truckers

May 27, 2008

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The average price of diesel fuel jumped 20 to 30 cents a gallon this past week, depending on what part of the country you were in, with the national average at $4.723 per gallon,
according to weekly figures from the U.S. DOT's Energy Information Administration.

That national average is 22.6 cents higher than it was just a week ago and $1.906 higher than a year ago. The average price in California topped the five-dollar mark, at a $5.027 average, up 29 cents from last week and $2.052 from a year ago.

The highest average regional price was in the Central Atlantic region, where the $4.913 average is up 23.1 cents from the previous week and $2.031 from a year ago. The lowest prices were in the Rocky Mountain region, at $4.653, up 21.1 cents from last week and up "only" $1.673 from last year.

The good news is, crude oil futures prices fell over $3 Tuesday, closing at $128.85 a barrel on the New York Mercantile Exchange. It was oil's biggest one-day decline since March 31. Prices hit a record high of $135.09 a barrel last Thursday.

Diesel prices and the plight of truckers are gaining national attention. An article in the New York Times Tuesday, "Soaring Fuel Prices Take a Withering Toll on Truckers," shares the plight of truckers large and small, including Jesse Hendley, a small logging fleet owner in Georgia.

"Most truckers are one major breakdown - a broken axle or a damaged engine - away from bankruptcy," Hendley told the paper. He laid off his last driver this month and turned to independent operators to ship his logs.

The article notes that, "If diesel prices do not decline and make that side of the business viable, Mr. Hendley says, he will have to sell his trucks, or try to sell them. That is just what thousands of other truckers are doing as they shed used rigs in what appears to be the biggest shakeout since trucking was deregulated in 1980."

On Capitol Hill Tuesday, Maine's two senators, Susan Collinsand Olympia Snowe, introduced legislation that would create a two-year pilot program to allow trucks carrying up to 100,000 pounds to travel on the federal Interstate system whenever diesel prices reach $3.50 a gallon, reported the Associated Press. Collins said the higher weight limit would allow for more cargo in each truck while eliminating the need for drivers to move onto local roads that require more fuel and extended periods of idling. She was joined at the announcement of the legislation by the Maine Motor Transport Association and the Coalition for Lower Fuel Prices (a group of independent truckers, primarily in the logging industry).

Also, last week, an amendment in the Defense Authorization Bill passed by the House of Representatives stipulates that for any Department of Defense contract for truck transportation or service using fuel, the motor carrier or broker must pass any fuel surcharge on to the person responsible for paying the cost of the fuel and to disclose that surcharge. The Owner Operator Independent Drivers Association, which is pushing for similar legislation for all truckers, praised the move.

Even in Europe, where high fuel prices have long been a reality, truckers are suffering. In England Tuesday, hundreds of lorry drivers converged on London to protest rising fuel costs.

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