Editorial: Winter of Discontent

Truckers in the Northeastern United States were shaking from both cold and anger last week as temperatures dropped and diesel prices soared.

A surprise blizzard and the ensuing traffic snarl along the East Coast gave truckers time to stew over prices at the pump that rose faster than the snow fell.

The national average retail price of diesel fuel increased more than 11 cents to $1.418 a gallon by Jan. 24. In New England, prices skyrocketed 39.5 cents per gallon from the previous week. And if that wasn’t enough, truck drivers were reporting prices as high as $2.24 a gallon at some pumps.

While winter fuel prices generally rise as refineries focus on producing home heating oil, the finger of blame for the higher than normal upward spike is pointing toward the Organization of the Petroleum Exporting Countries. Since OPEC cut production levels last March, crude oil prices have nearly doubled ,and U.S. inventories are at the lowest levels since mid-1997.

The government’s response has been lethargic, with Energy Secretary Bill Richardson agreeing only to divert 5 million barrels of crude oil intended for the Strategic Petroleum Reserve into general use. That amount would last less than one day.

Without additional government intervention, the economic engine that is trucking will start sputtering from a literal lack of fuel. Small and medium-size trucking companies operating in the Northeast say their customers are refusing to pay fuel surcharges. If shippers don’t become more reasonable, they could see some carriers going out of business before diesel prices drop.

That would mean fewer trucks to haul an ever-growing amount of freight, which in turn means shipping delays until other carriers pick up the slack, predicted Bob Costello, chief economist for American Trucking Associations.

ATA President Walter B. McCormick Jr. responded to the howls of outrage by asking President Clinton to tap into the Strategic Petroleum Reserve, lobby OPEC to increase production, incorporate a fuel surcharge into government transportation contracts and investigate trucking concerns about the possibility of price gouging and profiteering.

Other proposals include rescinding fuel taxes for truckers temporarily and freezing the price of fuel.

Trucking needs prompt action to increase the supply of diesel fuel while negotiations with the oil-producing countries take place. And the government should investigate legitimate allegations of price gouging by greedy retailers.