Warning that skyrocketing diesel prices could hinder the economic recovery and cripple the trucking industry, the American Trucking Assns. this week urged the U.S. Energy Secretary to take action.
ATA President Bill Graves sent a letter Thursday to Secretary of Energy Spencer Abraham, citing diesel prices that currently average more than $1.60 per gallon nationwide, the highest level since last year at this time.
"With oil prices continuing to rise, plus the Organization of Petroleum Exporting Countries cutting production, we remain concerned about prices in the future," Graves wrote.
He said diesel fuel is often the second highest operating expense after labor for a trucking company, equaling between 10 and 20% of total operating expenses
"This industry is on a recovery path, which is a great indication that the economy is on solid footing, but surging energy costs could easily act as a roadblock," he warned.
"One important change your department can make is to reduce the fill rate of the Strategic Petroleum Reserve. In 2003, the Department of Energy increased the SPR daily fill rate by roughly 66. I would respectfully request that the DOE suspend this higher rate during times of high oil prices like we currently have."
Graves claimed that when the government becomes a major purchaser of oil, it only bids up the price exactly when we need relief. And he told the secretary that he disagrees with the argument that SPR fill has a negligible impact on the price of crude oil.
"In fact," Graves wrote, "Goldman Sachs estimates that the oil reserve program is adding $4.25 per barrel to the price of crude oil, and this estimate may be conservative. The trucking industry understands the need to have the SPR for emergencies; we are only asking that the DOE be sensitive in implementing its policy to boost the reserve’s inventory."



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