High Diesel Prices Hurt Americans More Than You Think

From Myra P. Saefong at MarketWatch.com

High diesel prices are “even worse for an economic recovery than high gasoline prices,” said Denton Cinquegrana, senior markets editor at the Oil Price Information Service (OPIS). “Most Americans pay attention to the price of gasoline, but we totally neglect the impact high diesel prices have on goods and services.”

On Thursday, the average price of diesel at the pump stood at $4.166 a gallon, up 8 cents from a month ago and 16 cents above a year ago, according to AAA data. Prices for the fuel have only topped $4 during two other periods, in 2008 and 2011.

“Anything from milk and eggs at the grocery store, to beer at the liquor store, and the newest PlayStation games at Best Buy” all get to their destination somehow — and that somehow is usually by truck, said Cinquegrana.

“Consumers concentrate concerns on gasoline and rightly so, because it represents 65% of fuel used for transportation. That is followed by diesel at 20% and jet fuel at 11%,” said James Williams, an energy economist at WTRG Economics.

Consumers are also “less interested in diesel because they don’t buy it every week and the cost increases are indirect,” he said, but diesel costs are “passed through in the goods we purchase.”

An estimated 94% of all freight in the U.S. relies on diesel, and Americans use a lot of it — around 59 billion gallons annually, according the U.S. Energy Information Administration.

It’s easy to blame the high price of diesel on lofty prices for oil, but that’s not the only reason.

Indeed, many U.S. refineries pay prices closer to Brent crude prices, rather than West Texas Intermediate prices for the blends that are used, said Cinquegrana.

“The technological advantage of U.S. refiners resulted in the U.S. becoming a net exporter of petroleum products,” said Williams. “It also exposed the U.S. market to higher diesel prices leading to higher costs for the trucking and rail industries."

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@gasdieselprices tweeted link to this page. 2012-04-10 09:10:09 -0400
High Diesel Prices Hurt Americans - Ford O'Connell http://t.co/yKZYH3Y4
@CivicForumPAC tweeted link to this page. 2012-04-07 01:08:20 -0400
High Diesel Prices Hurt Americans More Than You Think - http://t.co/adltN78r #TCOT
published this page in In The News 2012-04-06 11:00:00 -0400
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