The national average retail price of a gallon of diesel leaped 34 cents for the week ending Monday, Oct. 3, to a new record of $3.144. That’s $1.09 more than in the same week of 2004.
The average price for the week increased to more than $3 a gallon in every region tracked by the U.S. Department of Energy. The biggest increase, 50 cents, was in the Lower Atlantic region; the smallest increase, 14 cents, was in the Rockies.
The highest average diesel price was in the Lower Atlantic region at $3.283, the lowest in New England at $3.012.
“The diesel prices are going to continue to rise,” said Department of Energy economist Jacob Bournazian. “This is the one year where we’ll see the record prices continually being set throughout the remaining portion of 2005. The main reason is due to the supply disruptions due to the two hurricanes. The refineries that have shut down have resulted in approximately 700,000 barrels per day being taken off the market.”
Hurricanes Katrina and Rita aren’t the only problem, Bournazian says. “Diesel prices generally peak in the winter when demand is at its highest. The other cost is the cost of crude oil. Crude oil demand is usually on its highest level on a worldwide basis during the fourth quarter, so right now this supply disruption has occurred at the worst possible time for diesel customers.”
Not until New Year’s will truckers see any relief, Bournazian says. “What you have here is diesel prices going to rise through the fourth calendar quarter, stay elevated, and probably fall back somewhat during the January-March time period,” he says. “From a consumer standpoint, there isn’t really an option for getting through it. The best truckers can do is to be much more knowledgeable about their fuel surcharge formulas and the pricing of their contracts.”
Owner-operators, in particular, are being hurt by steadily climbing diesel prices, said Rick Craig, director of regulatory affairs for the Owner-Operator Independent Drivers Association. “Those that are able and lucky enough are just shutting down and taking driving jobs,” Craig said. “Some with high truck and trailer payments, they’ve got to keep running to pay the bills.”
