(The Center Square) – Many diesel-dependent industries are feeling the pinch of soaring prices – including the biggest one, trucking.
National average diesel prices per gallon have risen for 15 straight days to $5.57 according to the AAA’s latest calculations – an all-time high.
Matt Hart, executive director of the Illinois Trucking Association, says the Illinois trucking industry is taking a double whammy.
“Our two biggest costs in the trucking industry are labor and fuel, and we certainly battled rising labor costs in 2021 and 2022, but now we are impacted by our second biggest cost, which is fuel,” he said. told The Center Square.
Rising diesel costs have outpaced gasoline, rising 56% in 2022. The latest price per gallon is a record high. A year ago it was $3.17.
Weaker refining activity and higher demand at home and abroad are part of the problem, according to the US Energy Information Administration. Distillate reserves hit their lowest level in 17 years.
Large carriers are better positioned to weather soaring diesel prices by negotiating contracts and buying their own fuel, but smaller carriers are feeling the pressure, Hart said.
“It’s these little carriers who maybe don’t have a fuel surcharge or are new to them or don’t have the ability to cover their own fuel, these are the guys who are feeling the biggest pinch right now “, did he declare. .
There are few electric trucks available, so the industry has to deal with that, Hart said.
“There is no alternative in the trucking industry,” he said. “When you buy an automobile, you can buy an electric car. There are no electric trucks to buy – the very few that are are prohibitively expensive. Diesel fuel is the main source of fuel for our industry which supplies 70% of the country’s goods, so we are very dependent on diesel fuel.
Rising diesel prices have to be absorbed somewhere, and in this case, consumers. Inflation is at 40-year highs, and the cost of energy like gasoline and diesel is a driving force.
“We have to charge more because of our costs, and ultimately the consumer ends up paying more when they see their local store prices go up because delivery costs more,” Hart said.
Typically, fuel prices stabilize around Memorial Day, so Hart hopes the peak has already been reached.