The average pump price for diesel fuel in the U.S. soared to an all-time high -- even when adjusted for inflation -- of $3.303 a gallon over the last week, the Energy Department said Monday.
The price jumped 14.6 cents a gallon as booming Asian economies put a squeeze on world supplies. In California, the price is more than 20 cents a gallon above the U.S. average.
Average gasoline prices in the U.S. also continued to increase, though not to record levels, by more than 14 cents a gallon to $3.013 and by 7.2 cents in California to $3.231, according to the federal agency.
Trucking companies said they were feeling the pain of every penny of increase in diesel fuel prices.
“This is just shockingly high,” said Patty Senecal, vice president of Transport Express, which moves freight throughout California and across the nation.
“Diesel is 30% of our operating costs, and we don’t have any options,” she said. “We can’t share trucks. The freight has to move, and we have to pass as much of the increase as we can on to our customers.”
The industry expects to pay a record $108 billion on diesel this year, up $5 billion from last year and more than double the $45 billion spent in 2002, said Bob Costello, chief economist for the American Trucking Assn., the industry’s main trade group, based in Arlington, Va.
Growing demand for diesel in China and India, including China’s use of diesel generators to produce electricity on a large scale, was the key reason for higher diesel prices, said Doug MacIntyre, a senior oil market analyst with the U.S. Energy Information Administration.
Analysts also blamed other factors for the increase, including the high trading levels for crude oil and the higher cost to produce cleaner-burning, low-sulfur diesel. And winter is on the way, increasing the share of home heating oil drawn from available supply.
“It’s a perfect combination to drive these prices,” said Phil Flynn, senior market analyst for Alaron Trading Corp. in Chicago. “Is there any relief in sight? If the economy slows, maybe. But right now it looks pretty bleak.”
The previous U.S. record for diesel was $3.157 a gallon, adjusted for inflation, set in August 2005 and matched last week.
The new record came in spite of a $1.95-a-barrel fall in crude oil futures for December to $93.98, a drop financial analysts attributed to profit-taking on Wall Street.
The average pump price for diesel in California hit $3.524, up 11.8 cents over the last week -- a rise of more than 22% since the beginning of the year, according to the Energy Department’s weekly survey of filling stations.
That was within striking distance of California’s all-time record of $3.54 a gallon, adjusted for inflation, in October 2005, according to the California Energy Commission.