Rising diesel prices show no sign of easing.
“Pain at the pump” is the norm these days as fuel prices are the highest we have seen in more than a decade. But if your vehicle takes diesel fuel, that pain is magnified to a degree we have never seen before. Indeed, on May 4, the national average was $5.428 per gallon, according to AAA, continuing a run of record highs. In one week, diesel prices rose 33 cents per gallon or at a much faster clip than regular gasoline.
Surging Diesel Prices
One year ago, the price of diesel fuel hovered around $3.10 per gallon. Regular gas averaged $2.91, while premium fuel retailed for $3.51. Diesel prices had long been priced somewhat lower than premium gasoline, but now diesel is costing at least 50 cents more. Surging fuel prices everywhere are exacerbated by Russia’s war on Ukraine and the resultant disruptions that has caused.
Most affected by rising prices are tractor-trailer drivers. Particularly small single-truck business owners who are not always able to easily pass on their cost increases. This could lead to owner-operators going out of business as the strain becomes too much.
The Cost of Fueling
How much fuel do big rigs hold? Typically, 120 to 150 gallons, sometimes double that for those equipped with double tanks for long hauls.
Conservatively speaking, a trucker with a 120-gallon fuel tank paying $3.10 per gallon a year ago would have paid $372 to fill that tank. Each gallon, though, would last about six miles on average or make 8 mpg if equipped with aerodynamic technology, according to Truckload Indexes. That is a far cry from the 30 mpg some diesel-equipped pickup trucks make or the 40+ mpg averages some car owners enjoy. Keep in mind that rigs routinely carry upwards of 80,000 pounds of payload when full. Quite frankly, fuel efficiency is not part of the trucking equation.
But fuel prices are far from static and we are currently in record-setting territory. Today, that same rig would cost $654 to fill, an increase of $282 in one year. Do the math and the cost has risen 75 percent in one year. That is far above the official 8.5-percent inflation rate offered by the federal government.
Supply Chain Woes
Most consumers understand that the supply chain is stressed, in part due to the global pandemic that has persisted for more than two years. Add in factors such as the Russian-Ukrainian War and a shortage of CDL drivers in the U.S., and the pressure is on.
With costs rising, someone must pay for that. If independent truckers are locked into unforgiving contracts, they will either eat the cost or may close their business. Or once their contracts come due, they will negotiate accordingly. Trucking companies with vast fleets have more power and maneuverability and will ensure that their costs are covered. This means that consumers will eventually pay more and that has become quite apparent when grocery shopping.
No Diesel Price Stability
As recently as last week, some analysts said that diesel prices would stabilize between $4.75 and $5.25 a gallon. But that price range has been breached and there is no stability in sight.
As a result, further strain on the trucking industry is inevitable and consumers will pay the cost when purchasing groceries, garden supply products, home improvement goods, and well beyond. Consumers are tightening their belts as a recession takes hold and deepens.
(2022, May 4). National Average Gas Prices. AAA. https://gasprices.aaa.com/
FreightWavesStaff. (2020, January 3). How many gallons does it take to fill up a big rig?. Freight Waves. https://www.freightwaves.com/news/how-many-gallons-does-it-take-to-fill-up-a-big-rig
Best, P. (2022, May 1). Price of diesel hits all-time high, straining the trucking industry. Fox Business. https://www.foxbusiness.com/economy/price-of-diesel-hits-all-time-high-straining-the-trucking-industry
See Also — How to Share the Road with Tractor-Trailers