Rising diesel prices are playing havoc with the trucking industry and businesses that have their own trucking operations. After adjusting for inflation, this summer’s forecast national average price would mark the highest retail gasoline and diesel prices since 2014, according to the U.S. Energy Information Administration (EIA).
Gasoline and diesel prices have already declined since their peaks in March, when the U.S. average gasoline price surpassed $4.00/gal and the average diesel price surpassed $5.00/gal. The EIA projected, “We expect these prices to continue falling throughout the summer…As U.S. refineries increase gasoline and distillate production, we expect this increased production to gradually place downward pressure on wholesale gasoline margins and retail prices during the summer. As a result, we forecast the average U.S. retail gasoline price will fall to $3.75/gal in July and to $3.68/gal in September. Similarly, we expect the average U.S. retail diesel price to fall to $4.44/gal in July and $4.20/gal in September.”
The American Trucking Associations (ATA) issued a dire warning to the White House about the effect that rising diesel costs will have on the trucking industry. In a March 10 letter addressed to President Biden, ATA President Chris Spear addressed the current fuel crisis caused in part by the U.S. decision to ban Russian oil in response to the war in Ukraine. The ATA called on the White House to increase domestic fuel production to provide drivers with relief at the pump.
The group pointed out that the trucking industry was already struggling through lingering supply chain issues caused by the pandemic and said that surging diesel prices could “decimate trucking capacity.”
The ATA also highlighted that smaller trucking companies are at risk of total failure because they lack the resources to withstand the increase in fuel costs. The failure of these small motor carriers, could unleash “catastrophic consequences for a supply chain that’s already overstressed.”
Russia’s invasion of Ukraine remains a large factor behind rising prices. Sanctions put on Russia include the country’s selling of crude oil, which is one of the biggest factors in determining fuel prices.
