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Surging diesel fuel prices may impact us all

Trucks carry 70% cf freight, food, and consumer items.

BUFFALO, N.Y. — With the Russian invasion of Ukraine still driving up worldwide oil prices, the cost of diesel fuel has soared just like gasoline. While most of us do not fuel up with diesel, we are still affected at the supermarket or with any delivery. 

2 On Your Side looked at the overall impact of diesel driving up our prices.

As the trucks roll in to a local distribution warehouse for a supermarket chain, be aware those massive diesel powered vehicles are burning through some very pricey fuel right now. Professor Patrick Penfield who is a supply chain studies expert at Syracuse University tells us, "Diesel prices have gone up almost 42% since the beginning of the year which is again something we've never seen before."

While we still get frustrated with our regular gas prices, consider that the per gallon cost of diesel is about a dollar and a half or more than gas.

Calvin Lazier is an independent truck driver and owner/operator from Orlando, Florida who stopped in Cheektowaga for a hose repair for his big rig. He says prices are high here in New York state but notes, "I got a friend who drives out to California and they're paying $7 a gallon out there."   

Eventually it's going to hit us all in the pocket to some degree. 

"Usually there's a correlation - every 10% that fuel prices go up there's a point three percent increase in inflation. So that's what consumers are going to see - you're gonna keep seeing prices go up," Professor Penfield said. 

Factor in the point that it's estimated 70% of our consumer goods and freight are carried by truck. 

Just as the trucking companies and independent truckers operate on a fairly thin profit margin, they'll eventually pass that on to retailers. That includes what we look for in the supermarket aisle, like food and other products. 

"For the grocery stores because they run on very slim margins also, So they, in order to stay in business, they have to pass that costs along to the consumer which unfortunately creates inflation," Penfield said.

And that applies to any delivery we're getting.

Also consider that farmers growing that food use diesel powered tractors and other heavy farm machinery.

Then diesel powered freight trains and even those ocean going ships with freight containers now under environmental regulations use diesel instead of dirtier bunker oil.

And there's another diesel dilemma according to Penfield. 

"In Europe because of the Russian embargo of oil and gas - they're using diesel to generate electricity and so unfortunately that's again impacting the amount of supply of diesel that we have," Penfield said.

As for truck drivers, it turns out a lot of the larger trucking companies can actually add diesel fuel surcharges to help cushion some of that higher cost of diesel fuel. But the independent owner operators are especially getting hit hard right now.

 "A lot of them are dying because of the fact that fuel is killing them. A lot of them are. Independents are going to company drivers cause they don't have to worry about fuel - they don't have to worry about mechanical or anything else," Lazier said.   

"If you're a small trucking company last year at this time - you're paying about $10,000 for fuel - this year this time you're paying about $18,000. When you see prices go up this high - that usually means we see a lot of bankruptcies with these small truck owner/operators," Penfield said.

That could hurt all of us in the long run as those drivers are crucial to haul the food and freight to the stores and eventually to our homes. 


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