Diesel price dips may not last long

| Friday, May 06, 2005

Though the price of diesel has been dropping in recent weeks, analysts say those decreases may not last long as the summer driving season heats up.

Tom Kloza, chief oil analyst at Oil Price Information Service in Wall, NJ, said in an interview in Logistics Management that prices would be especially high next summer when the federal government introduces cleaner-burning diesel.

While he doesn’t expect crude oil to reach $65 a barrel this year, Kloza said soaring prices in the next year or two could translate into higher prices at the pump.

Some estimates say diesel prices could go as high as $3 per gallon once low-sulfur diesel fuel makes its debut.

“We call low-sulfur diesel the ultimate LSD,” Kloza said. “It will be a bad trip for a number of people next year.”

One thing that could help truckers prepare for that bleak outlook is the fuel surcharge provision currently making its way through Congress. The provision was recently approved by the U.S. House as part of its version of the highway bill.

Another version is currently making its way through the Senate and is expected to be open for debate on the Senate floor the week of May 9.

The language in the House bill at Section 4139 requires all motor carriers, brokers and freight forwarders running truckload freight to implement fuel surcharges and pass on 100 percent of those charges to the person who actually pays for the fuel.

The Owner-Operator Independent Drivers Association is urging truckers to fax and call – writing may not be fast enough – their U.S. senators and urge them to include the same fuel surcharge language in the Senate’s version of the bill.

If truckers are uncertain who their senators are, they can contact OOIDA’s Membership Department, and they will look up the information. The toll-free OOIDA number is 1-800-444-5791.

Truckers can also call the U.S. Capitol switchboard at (202) 224-3121, give the operator their ZIP code and be directly connected to their senator’s office.

– By Terry Scruton, senior writer
terry_scruton@landlinemag.com

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