Diesel prices have been volatile for several years but have been climbing fairly steadily for a year. Instability in Venezuela and the Middle East could send prices higher.
The American Trucking Associations has called on President Bush to take steps to ensure that diesel prices don’t escalate out of control and has recommended using the Strategic Petroleum Reserve to stabilize prices, if necessary. In a Jan. 13 letter, ATA President William Canary noted that diesel prices were averaging $1.50 a gallon nationwide, which is more than 35 cents above the average a year earlier.
The Energy Department’s Energy Information Administration reported recently that the oil market is vulnerable to volatility in the coming months due to a number of forces, including the situation in Venezuela, increased tensions in the Middle East and low oil inventories. “This makes me believe that unlike the last time diesel prices reached their current levels, we are more likely to see higher prices than lower ones in the future,” Canary said, adding that with every 10-cent increase in the price of diesel fuel, on average, 1,000 carriers with five trucks or more will file for bankruptcy.
