Rising Diesel Prices Could Drive Up Fuel Costs for New York Consumers

The post Rising Diesel Prices Could Drive Up Fuel Costs for New York Consumers first appeared on Crafting Your Home.

New York consumers could feel the effects of sharply higher diesel prices beyond the pump as transportation companies deal with rising fuel costs.

The average price of diesel in New York reached $6.46 a gallon on Sept. 19, according to AAA. That’s up from about $5.63 a month earlier and $3.92 a year ago.

New York diesel prices have climbed quickly.

New York’s average diesel price was $6.46 per gallon on Sept. 19, compared with $6.11 a week earlier. A month ago, the average was $5.63, while a year ago it was $3.92.

The state’s weekly diesel data tells a similar story. The New York surrogate region tracked by the New York State Energy Research and Development Authority reached $6.312 per gallon for the week ending Sept. 14, compared with $5.744 the previous week and $3.920 a year earlier.

Why diesel matters to shoppers

Diesel prices don’t only matter to people who drive diesel-powered vehicles.

Trucks that deliver food, household goods, construction materials, and other products depend heavily on diesel. When operating those vehicles becomes more expensive, transportation companies have to decide how much of the additional cost they can absorb.

Robert Benuzzi, transportation manager for Adirondack Beverage and a board member of the Trucking Association of New York, told WRGB that his company has been absorbing some of the higher fuel costs, but there are limits to that.

He explained that transportation companies eventually have to account for higher fuel expenses when setting the price of each load.

That doesn’t mean every product will immediately become more expensive. Businesses can respond to higher fuel costs in different ways, including absorbing some of the increase or adjusting transportation charges.

The increase isn’t limited to New York.

The U.S. Energy Information Administration reported an average retail diesel price of $6.285 per gallon for the week ending Sept. 14, up from $5.967 the previous week and $5.257 a month earlier.

The EIA says several factors, including crude oil prices, refining margins, distribution costs, and taxes, influence diesel prices. It also noted that tight global supplies of distillate fuel and elevated crude prices have pushed prices higher in recent months.

Trucking companies are feeling the squeeze.

WRGB reported that Benuzzi said most trucks get only about six or seven miles per gallon, meaning even small changes in diesel prices can add significantly to operating expenses over long distances.

For a company operating a large fleet, the difference between paying around $4 a gallon and more than $6 can add up quickly over thousands of miles.

Some trucking companies may pass part of those costs to customers through higher freight charges. Others may absorb the increase for a period of time.

What could happen to consumer prices?

A product doesn’t necessarily become more expensive simply because diesel prices rise. Retailers and manufacturers have other costs, contracts, and pricing decisions to consider.

Reuters reported on Sept. 18 that record diesel prices were already pressuring farmers and transportation businesses, with the effects potentially reaching consumer food prices over time. The report also noted that existing freight contracts can delay how quickly higher fuel expenses show up in consumer prices.

Gasoline is also expensive.

AAA’s Sept. 19 data puts the state’s average regular gasoline price at $4.48 per gallon, compared with $4.13 a month earlier and $3.24 a year earlier.

So the current fuel-price story extends beyond diesel.

Relief isn’t guaranteed to arrive quickly.

Fuel prices can change when conditions in crude oil and refined-product markets change, but the effects aren’t always immediate.

That helps explain why a change in crude prices doesn’t necessarily translate immediately into a corresponding change at every pump.

For New York consumers, the key issue now is whether the recent diesel increase proves temporary or becomes a longer-lasting cost pressure.

For the moment, the numbers are moving in the wrong direction: New York diesel is substantially more expensive than it was a month and a year ago.