Editorial: Lingering Fuel Headaches
img src="/sites/default/files/images/articles/printeditiontag_new.gif" width=120 align=right>While the almost 11-cent decline in diesel prices over the past two weeks was most welcome to trucking, the situation is nowhere near normal, and the potential damage from sky-high fuel prices is hardly over.
Diesel prices remain more than 38 cents a gallon higher than year-ago levels, while gasoline is almost 35 cents a gallon higher.
Even now that fuel prices have fallen back from record levels, the U.S. trucking industry is still paying a weekly penalty of more than $300 million to fill its tanks.
Rising fuel prices have had a severe impact on trucking. While many fleets have surcharges built in to their rates, much of the cost increase hasn’t been refunded in the past. And small fleets in particular are often unable to recoup their ballooning expenses.
The run-up in prices this year underscores the need for a cogent national policy on motor fuel in order to protect the complicated freight-delivery system that our entire society has come to rely upon.
Much of the force behind skyrocketing prices was created by market fear that hostilities in Iraq could disrupt the flow of petroleum. The fear sent crude oil prices to record levels — just below $40 a barrel — and retail prices for both diesel and gasoline to new peaks.
The nation still has no fuel policy that can be relied upon for relief. When trucking asked the White House to release stocks from the Strategic Petroleum Reserve, the administration said it was holding off until war began in case supplies were disrupted.
In fact, as the shooting was about to start, the price of crude fell about $10 a barrel. This has provided limited relief at the pump. As of late last week, however, crude prices were beginning to creep back up as it became apparent that the fighting in Iraq was unlikely to end in a week or two.
And still the SPR has not been tapped.
A national fuel policy would presumably spell out when oil reserves should be placed on the market. A policy also should have other strategies designed to counter fast-rising prices or a sharp drop in supply caused by a war or other catastrophic event.
This article appears in the March 31 print edition of Transport Topics. Subscribe today.
