Editor’s note: Diesel rose 2.9¢ to $4.123 on March 12, its seventh straight gain and the ninth in 10 weeks.
This Editorial appears in the March 12 print edition of Transport Topics. Click here to subscribe today.
Fuel prices are again big news, as the national average for a gallon of retail diesel climbed to almost $4.10, well above that strong $4-a-gallon psychological threshold.
Last week’s average price represents the highest level for diesel since May, and the 4.3-cent weekly jump was the sixth consecutive rise reported by the Department of Energy.
This latest run-up in fuel prices has been so quick and so steep that many fleets are surely suffering, thanks to the lag time between having to pay the higher prices and the time it takes to bill customers for surcharges.
But perhaps some good will come of all this.
There has been a marked increase in interest in alternative fuels to power commercial vehicles, with most of the attention going to natural gas, and mainly in its compressed form.
Last week, President Obama traveled to a Daimler Trucks North America Freightliner plant in North Carolina to draw attention to his new proposal to have the federal government provide a tax credit to lower the pain for fleets that are willing to switch to natural gas as their fuel of choice (see story, p. 1).
There’s no doubt that natural gas costs a lot less than diesel, but the $35,000 to $40,000 premium currently charged for natural gas-powered heavy-duty trucks has kept many fleets from even experimenting with the new vehicles.
The president’s offer to have the federal government cover 50% of the incremental costs through a tax credit for the next five years could be just the kind of spark necessary to get more of these trucks on the road.
The tax credit idea comes up just weeks after Navi-star Inc. and Clean Energy Fuels Corp. unveiled a plan to underwrite all of the acquisition cost difference for fleets that pledge to buy their natural gas from Clean Energy.
Up to now, all the natural gas engines for big trucks have come from Cummins and its partners, but Volvo AB and Navistar are currently at work on their own versions.
Also last week, Rep. Peter DeFazio (D-Ore.) asked the president to crack down on speculators who have been helping drive the price of oil through the roof.
DeFazio asked Obama to endorse his bill to place a small excise tax on speculative oil trading, promising that doing so would quickly push fuel prices down.
We heartily endorse both developments as helping to trim the cost of delivering the nation’s freight.
