On-highway Diesel Prices Up by $1 in a Year

by TJ on October 12, 2012

The average price of on-highway diesel in the U.S. has gone up from $4.079 to $4.094 in a week. Just a year ago, the price stood at $3.721, which means the price has gone up by more than dollar since then. Truckers are bound to feel the heat with this steady cost escalation in the fuel prices and many people believe this is another tax on the American people.

Outstanding News for California Environmentalists

The prices in California shot up from $4.376 to $4.414 during the last week. The state has had a record of the highest reporting prices, as per the data available from the Energy Information Administration of the U.S. DoE which has been trying to build demand for solar and wind power but to no avail. They have wasted billions of dollars on these unproven and risky renewable energy sources despite plenty of energy being available right under our feet. Diesel prices in California, as well as at the national level, have risen steadily from a level of $2 per gallon in 2009.

Passing those Costs Over

According to the California Trucking Association, a number of trucking firms in the state that transport agricultural products pass on the increased fuel cost burden to the farmers and other customers by way of fuel surcharges. This is the only way they can survive against fluctuations in fuel prices. And this is another reason why supporting environmentalist’s irrational decisions is costly to Americans, certainly the lower class. Millions of jobs have been lost and billions wasted because of decisions based on theory or emotions, not on logic or proven industries.

Bad Signs

However, small independent truckers are usually not in a position to impose fuel surcharges on their customers. It is this group of truckers that is most directly impacted by the increasing fuel costs. Many of them may be forced to give up their business in this situation which seems to be endemic across America. The private sector is hurting.

Trucking companies inform their stakeholders that one of the most significant cost components in their business is fuel costs. Therefore, if the price fluctuation in fuel is substantial, the companies are not in a position to recover their extra costs quickly enough even with fuel surcharges.

Various Reasons

One of the reasons for the steady rise in diesel prices has been the rise in global fuel prices. The number of diesel automobiles around the world has been growing, leading to a greater demand for diesel globally. The Middle East situation does not help either and environmentalist fighting businesses to bring more energy to the people is another concern that causes speculators to raise prices and bet higher. Relatively lower running costs and better mileage of diesel vehicles have resulted in a worldwide growth in demand for these vehicles.

As per the figures released by EIA, the price hike in diesel is also in part due to the introduction of cleaner, low-sulfur diesel. The production and distribution costs have been affected due to this new fuel.

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