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Tensions rise over fuel prices

Tensions rise over fuel prices

From owner-operators to big OTR carriers to public fleets across the country, record-high fuel prices are wreaking fiscal and operational havoc, with labor unrest glowering in the wings

From owner-operators to big OTR carriers to public fleets across the country, record-high fuel prices are wreaking fiscal and operational havoc, with labor unrest glowering in the wings.

The U.S. Energy Information Administration (EIA) reported that gasoline and diesel prices for the week ending Aug. 22 increased 6.2 cents and 2 cents per gallon, respectively, boosting the national average for gasoline to $2.61 per gallon and diesel to $2.58 per gallon. That’s nearly 73 cents per gallon higher for gasoline and 71.4 cents per gallon higher for diesel compared to last year at this time, the EIA added. The situation is even worse on the West Coast, particularly in California, where fuel prices exceed $3 per gallon for both diesel and gasoline.

This staggering increase is hitting police departments and school districts especially hard. For example, the Virginia State Police estimated that rising gasoline prices would add $1.2 million to its $3.7 million annual fuel budget, an increase of 32%. The police department of Frederick, MD, is already $57,000 over budget because of fuel prices, having paid 33% more for fuel than it did in 2004.

With fleets of school buses hitting the streets in two weeks, local districts fear they could see dents of up to $300,000 in their budgets, reported the Virginia Pilot. For example, Portsmouth, VA, budgeted $380,000 for fuel, but expects it’ll need another $95,000.

The American Trucking Assns. (ATA) yesterday issued a statement pointing out that numerous reports of budget woes felt by school districts across the nation mirror that of trucking fleets.

“We are now at a critical point for the industry in terms of fuel prices,” ATA chief economist Bob Costello said. “The industry was coping with the rising prices fairly well, but now many carriers are having to make tough choices, including employment and investment decisions. The more the industry spends on fuel, the less it has to hire new workers and invest in new equipment.”

For many long-haul truckers, especially owner-operators, high diesel prices are proving to be the last straw. On Aug. 19 a group of independents formed a 15-truck convoy and drove through Santa Maria, CA, to protest the rising cost of diesel. And in Florida, a loose group of owner-operators, company drivers and small fleets is trying to jumpstart a nationwide trucking strike Oct. 31, in hopes of getting the federal government to put a cap on fuel prices.

In fact in Hawaii, the state’s Public Utilities Commission implemented price ceilings on the weekly pre-tax wholesale price of gasoline, effective Sept. 1. This marks the first such attempt in the U.S. since Congress authorized price controls in 1973 during the Arab oil embargo, reported the Wall Street Journal. Because of its geographic isolation, Hawaii has typically endured higher petroleum prices than the national average.

The grassroots effort in Florida also involves delivering petitions to Congress calling for lower fuel prices, mandatory freight rate hikes, equal speed limits for trucks and cars. Marie, the wife of an owner-operator in Belleview, FL, who declined to give her last name, is handling the distribution and collection of petitions nationwide. She told Fleet Owner her plan is to deliver the signed petitions – totaling 400 to date after a week of canvassing truckstops statewide – on Oct. 17.

“Fuel prices alone are just killing us, and that’s before you start talking about higher tolls, insurance, the rising cost of trucker services like showers and maintenance work,” Marie added. “The government has got to be willing to work with us and give us a break on fuel prices. It’s really affecting my household and thousands of other trucker families too. With the cost of fuel added to our truck payments and repairs, house payments, and food bills, we are barely getting by. Someone has to stand up and do something.”

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