Michael Dyll, CEO of Texas International Freight, said high diesel costs are just the latest misfortune for his company since the start of the pandemic. “They also see the rise in fuel,” he said, “so it’s not a surprise.” The company has rolled out fuel surcharges to help cover costs, he said, noting customers have so far been understanding. Geovanni Aquirre, who works as a generator repair technician for Waukesha Pearce, said filling his utility truck’s tank with diesel used to cost $70 to $80 twice a week. Want more news? Listen to today's daily briefing above or go here for more info JH Walker Trucking now charges fuel surcharges across the entirety of its business after recent diesel price hikes, said Houston Walker, the company’s chief financial officer. Smaller shipping companies in Houston are working to do the same. and Omaha-based rail company Union Pacific have contracts that factor in the fluctuating cost of diesel. Large companies such as tank barge operator Houston-based Kirby Corp. To stay afloat, he is cutting costs and passing along price hikes to customers when he can. Chris Saporito, owner of Houston-based industrial transport company Mallini Transport, said he’s spending about $55,000 a week on diesel for his company’s trucks, up nearly 60% from the $35,000 a week he was spending in January. Transportation companies are passing along rising costs out of necessity, they said. “That is further indication that some of these transportation costs are being embedded into non-energy prices,” said Chris Lafakis, an energy economist at Moody’s Analytics. I don’t think anyone could cheerlead for an economic downturn to bring down prices, but that would do it.Īverage prices for foods such as meat, poultry, fish and eggs are up 14% over last year - the largest 12-month jump since 1979, according to the Consumer Price Index issued earlier this month by the Bureau of Labor Statistics. Retailers will not be able to pass along rising costs while “food and energy costs are eating into consumer wallets,” it predicted. Demand for goods is already “cooling” as inflation squeezes family budgets, according to financial services firm Moody’s, which downgraded the national retail outlook to “negative” last week. “I don’t think anyone could cheerlead for an economic downturn to bring down prices,” he said, “but that would do it.”Ī recession may be in the cards. With no signs of peace in Ukraine and little chances of more refining capacity coming online, there is little hope of prices abating any time soon, said Patrick De Haan, head of petroleum analysis for fuel tracking firm GasBuddy. Russia exports about 700,000 barrels a day of diesel to Europe, according to S&P Global Commodity Insights. The nation’s diminished refining capacity is hitting the Northeast harder because much of its diesel comes from the Gulf Coast, where refineries are already operating at maximum capacity as supplies from Russia slide from the global market. Prices are rising even faster in the Northeast, where diesel topped $6 a gallon last week as stockpiles fell to levels that are 47% lower than normal for this time of year. The world has lost 3 million barrels per day of refining capacity since the start of the pandemic, including 1 million barrels per day in the United States - a result of mounting costs and declining prospects for gasoline as automakers accelerated the transition to electric vehicles. While crude supplies have risen as oil production increases and as the federal government taps the Strategic Petroleum Reserve, there aren’t enough refineries left to turn it into fuel. (Gas prices, meanwhile, have jumped by about 36%.) While gasoline stockpiles are around 8% below the seasonal norm, diesel’s are about 22% below normal as demand soars and refineries struggle to produce enough to keep up. Houston Chronicle May 23, 2022ĭiesel prices, which have jumped 56% to $5.60 a gallon from $3.60 a gallon in January, are rising faster as inventories of the fuel stored at commercial tank farms have plummeted. “We’re losing repeat customers,” he said, noting that revenue has fallen by about 15% year-over-year, “because we’re charging more than we did last time.”Īs the nation endures historically high gasoline prices, the pain drivers feel at the pump is nothing compared to the deeper wounds inflicted by the soaring price of diesel. But the increase to $140 from $70 is more than some customers can afford. Diego Davalos, owner of Houston Affordable Movers, said he’s had to double his transportation fee to help offset the $800 a day he spends fueling his moving trucks on the way to apartment complexes around Houston.
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