Diesel: Fuel for Inflation?

Truckers Face Record Pump Prices to Get Goods to Stores

The auto club AAA reported yesterday that both diesel and gasoline prices smashed previous highs. Gasoline rose to a nationwide average of $3.246 a gallon for regular unleaded. Diesel, which has been setting records almost daily for the past three weeks, hit a nationwide average of $3.876 yesterday.

The average price of diesel fuel has been shooting up even faster than that of gasoline, rising more than 50 cents in barely two months. That is not only squeezing profit out of the trucking business but is also driving up the cost of delivering all kinds of goods to American consumers.

“People talk about gasoline, but it’s diesel that puts the goods on the shelves,” said James Hughes, an independent trucker who yesterday was hauling stone in Maryland, from La Plata to Hollywood.

The rapidly rising price of diesel fuel has the potential to spread through the economy, complicating the Federal Reserve’s goal of containing inflation while stimulating growth. According to the American Trucking Association, trucking accounts for about 70 percent of U.S. freight transportation. Last year, the volume of goods shipped by truck fell 1.5 percent from the previous year, the association said.

Washington Post